UDC 621.039=161.1

JSC “SSC RIAR” Annual Report 2016 [Electronic resource]. — E-text data (7 MB). — Dimitrovgrad: JSC “SSC RIAR”, 2016. — 167 pages — 1 RAM disk (CD-ROM); 12 cm — System requirements: Pentium III or better; 512 MB RAM; 35 MB of available hard disk space; Windows 95/98/XP/7/8; Adobe Acrobat Reader; CD-ROM 2x or higher; mouse. — Heading from the title screen.

The Report covers the key financial, economic and production results of JSC “SSC RIAR” activities for the reporting period as well as the results of the sustainability-related activities (economic, ecological and social impact on the world around us). The Report has been prepared in conformity with the GRI standards, version G4. The Report focuses on the strategy and perspectives of JSC “SSC RIAR” as well as on the activities targeted at enhancing the effectiveness of corporate management and nuclear and radiation safety. The Report has been issued on a voluntary basis and is addressed to a wide audience.

© Joint Stock Company “State Scientific Center — Research Institute of Atomic Reactors” (JSC “SSC RIAR”), 2017 ISBN 978-5-94831-159-3 JSC “SSC RIAR” Annual Report 2016 3

CONTENTS

General Information

Key Performance Indicators ...... 6 1.1. General Information ...... 16 Appeal of Directors ...... 8 1.2. Key Competencies. Products Key Events ...... 10 and Rendered Services ...... 20 Awards ...... 12 1.3. Position in the Industry ...... 21

Strategy Management of Capital and Performance 2.1. Mission and Values ...... 26 4.1. Financial Сapital ...... 78 2.2. Strategic Tasks ...... 28 4.2. Intellectual Сapital ...... 85 2.3. Business Model and Capitals ...... 29 4.3. Output ...... 97 2.4. Relevant Aspects of Activity ...... 31 4.4. International Activities ...... 109 4.5. Human Capital ...... 112 4.6. Natural Capital ...... 128 4.7. Occupational Health Strong Corporate Governance and Safety ...... 140 3.1. Members and Structure of the Governance Bodies ...... 36 3.2. Corporate Governance System ...... 40 3.3. Auditing of Financial and Business Activities ...... 44 Stakeholder 3.4. Key Performance Indicators ...... 45 Engagement 3.5. Internal Control and Auditing System ...... 48 5.1. Public Reporting System ...... 146 3.6. Risk Management ...... 51 5.2. Engagement in Report Drafting ...... 149 3.7. Quality Assurance ...... 60 5.3. Public Assurance Statement ...... 153 3.8. Procurement Management ...... 62 List of Abbreviations ...... 158 3.9. Production Management...... 63 Glossary ...... 164 3.10. Investment Management ...... 65 3.11. Property Management ...... 66 3.12. Public Position as to Sustainable Development ...... 67 4 JSC “SSC RIAR” Annual Report 2016 5

G4-31

G4-31 6

KEY PERFORMANCE INDICATORS Difference between indicators in 2016 and in 2015

JSC “SSC RIAR” Annual Report 2016 7

Actual value Estimates 8 APPEAL OF DIRECTORS

G4-1

Dear Colleagues of the Federal Target Program on nuclear power technologies of new generation. A high level and Partners! of performance discipline was also confirmed by successful fulfillment of obligations under more In 2016, an important step in the sustainable than 50 agreements with both Russian and foreign development was made by establishing customers. the ROSATOM’s Scientific Division as an industry Taking into account a high importance expertise center for scientific competencies able of high-tech material-and-technical upgrade to create new breakthrough innovative technolo- of the enterprise and re-targeting of its production gies not only for Russia but also for the world’s and scientific capabilities according to the current market. RIAR, being the largest Russia’s research market demand, the short-term strategic task is center of civil nuclear engineering is rightly seen to bring certain investment projects to the imple- one of the key enterprises of the Division mentation stage. We have to issue commercially and branch on the whole. viable products and, by setting new strategies, By the results of the reporting period, we go toward an expected outcome. the Institute demonstrated a quantum growth The tasks set to JSC “SSC RIAR” by in some indicators: the research and production the management of the ROSATOM Scientific plans were fulfilled in full scope, significant financial Division are complicated indeed. Based and economic results were achieved, as well as rise on the approach of professional competence in labor productivity, and international cooperation and responsibility, including the interaction was extended. with stakeholders, we are able to provide The Institute continues implementing the long-term sustainable development key projects of Russia’s nuclear engineering. of the enterprise. In particular, a wide range of research in new I hope that knowledge, competence fuels is carried out, including activities under and experience of the RIAR’s employees will allow the “Breakthrough” Project. The construction us to meet ambitious challenges and remain of a multi-purpose fast test reactor and poly- the leading enterprise of nuclear engineering functional radiochemical complex is on schedule. taking a rightful place in the Russia’s economy! In 2016, JSC “SSC RIAR” fulfilled its obligations under the contracts signed in the frame JSC “SSC RIAR” Annual Report 2016 9

G4-1

Dear Friends, (ICERR) that once again confirmed the worldwide recognition of JSC ”SSC RIAR” as a reputable Colleagues and Partners! research organization. The professional competence and ambitions I am pleased to present you the 2016 Annual of RIAR’s personnel contributed greatly to the high Report of JSC “SSC RIAR” that provides extensive production and finance indicators achieved. coverage of production, financial, social Our specialists put in great efforts and ecological aspects of our activities. to optimize purchase procedures, reduce costs th The year of 2016, the 60 Anniversary for non-core activities, etc. This year made it clear of JSC “SSC RIAR”, was marked with strong that the effectiveness of the enterprise’s activities challenges and landmark achievements. Despite depends not only on the dynamic R&D but also tough economic conditions our Institute faced on cost-based budged reduction measures. at the beginning of the reporting period, we It is important to mention that the reporting managed to make decisive progress. As for the R&D period showed a rise in labor efficiency (by more activities, the scope of orders from Russian than 30% as compared to 2015) as well as in salary. enterprises increased nearly twice; a successful We are undoubtedly aimed at a further increase fulfillment of the production plan turned a profit in these indicators as well as at the implementation of 3.1 million rubles that is 55% higher as compared of social programs, costs for which are increasing to the previous year of 2015. every year. In 2017, we are going to sign a two-year We managed to increase the output collective labor agreement that will be approved of radioisotopes thus providing the top line growth by the RIAR’s Trade Union. up to 1.8 billion rubles. In 2017, we will continue The jubilee year of 2016 was yet more its promotion by upgrading the production lines, proof of the importance of preserving improving logistics and quality and developing and transferring knowledge. All that was created new technologies to produce promising by our long-service employees takes application radioisotopes. and development. Once again I would like Over the reporting period, we proceeded to express my gratitude for their selfless implementing our strategy aimed at strengthening labor and great contribution to the nuclear RIAR’s positions in the international market of high-tech products and services. Thanks engineering. to the effective use of our reactors and research In conclusion, let me gratefully acknowledge infrastructure, the index of the ten-year our partners for the fruitful cooperation and trust portfolio of foreign contracts achieved and RIAR’s staff for their high professionalism. 60 million USD. One of the important events I hope that the results of this reporting period in 2016 was the designation of RIAR as the IAEA will become a solid ground for further sustainable International Centre based on Research Reactors development of the enterprise. 10 KEY EVENTS JSC “SSC RIAR” Annual Report 2016 11 12 AWARDS JSC “SSC RIAR” Annual Report 2016 13

14 General Information Годовой отчёт АО «ГНЦ НИИАР» 2016 15

16 General Information

1.1. General Information

Table 1.1.1 gives the essential information about the Institute Table 1.1.1

Full name G4-3 Акционерное общество «Государственный научный центр — in Russian G4-7 Научно-исследовательский институт атомных реакторов»* Joint Stock Company “State Scientific Center — in English Research Institute of Atomic Reactors“ Short name

in Russian АО «ГНЦ НИИАР»

in English JSC “SSC RIAR”

Location and postal address

G4-5 433510, Russian Federation, Ulyanovsk region, Dimitrovgrad, Zapadnoye Shosse, 9

Contacts

E-mail [email protected] Web-site http://www.niiar.ru Phone +7 (84-235) 3-27-27 Fax +7 (84-235) 3-58-59

* Hereinafter referred to as JSC “SSC RIAR”, Institute, Organization.

Registrar

Joint Stock Company “R.O.S.T. Registrar” of the securities market that carries out its activities was approved as a Registrar of JSC “SSC RIAR” in on the basis of License No. 10-000-1-00264 accordance with Resolution No.4 of the Board of as of December 03, 2002 issued by the Federal Directors of JSC “SSC RIAR” as of December 30, Commission on Securities Market of the Russian 2008. This Company is a professional participant Federation.

Information about Registrar Requisites: OGRN 1027739216757; TIN 7726030449. Short name: JSC “R.O.S.T. Registrar”. Postal address: 18/13 Stromynka St., 107996, Moscow. Phone / Fax: +7 (495) 771-73-36 / +7 (495) 771-73-34. E-mail: [email protected] The date since when the Registrar has maintained the register of issuer’s inscribed stock: 11.01.2009 JSC “SSC RIAR” Annual Report 2016 17

Stakeholders (Table 1.1.2) Table 1.1.2 Key information about JSC “SSC RIAR” stakeholders

Legal/ Number of shares Share in the charter capital, % Stakeholders postal address by 31.12.2015 by 31.12.2016 by 31.12.2015 by 31.12.2016

Joint Stock Company “Atomic Energy 6 320 505 675 8 953 605 675 49,8235 52,7803 Power Corporation” Russian Federation represented by ROSATOM State Atom- 24 Bolshaya Ordynka St., 0 1 645 035 900 0 9,6972 ic Energy 119017, Moscow Corporation

ROSATOM State Atomic 6 365 286 800 6 365 286 800 50, 1765 37,5225 Energy Corporation

Subsidiary Companies and Joint Ventures (Table 1.1.3) Table 1.1.3 Subsidiary companies and joint ventures of JSC “SSC RIAR”

Company Activities Stake, % NIIAR — GENERATSIYA Ltd. Generation and supply of energy: electricity, heat, steam, hot water, 100 drinking and general-use water, water discharge

Belorussian-Russian Joint Stock Company Production, storage, receipt, usage, transportation of radioactive 51 “Isotope Technologies” materials and products; design engineering, fabrication, assembling, adjustment, failure assessment, operation, repair and maintenance of radioisotope-based devices and facilities

Chinese-Russian Joint Venture Production of Cf-252 neutron sources and other sources, their integration 50 “Beijing CIAE — RIAR Radioisotope in devices and equipment, selling at the territory of the People’s Republic Technology Co. Ltd.” of China, promotion of Cf-252 sources and other sources for their use in the industry of the People’s Republic of China, rendering services for consumers 18 General Information

Background

Figure 1.1.1 represents schematically More detailed information can be found the history of the Institute development. at http://niiar.ru/?q=history.

Fig. 1.1.1. RIAR’s history JSC “SSC RIAR” Annual Report 2016 19 20 General Information

1.2. Key Competencies. Products and Rendered Services

The key competencies as well as key of its activity (Fig.1.2.1) and were already products and services produced and rendered described in detail in the previous Reports by JSC “SSC RIAR” are related to areas (http://niiar.ru/annual_report).

G4-4

Fig. 1.2.1. Products and services produced and rendered by JSC “SSC RIAR”

The key consumers of the R&D products institutes carrying out ionizing sources-based and services are ROSATOM’s enterprises: research (e.g. Moscow Engineering and Physical research and design organizations developing Institute, JSC “NIITFA”, Kurchatov Institute, materials, fuels and components for nuclear JSC “SNIIP”), enterprises manufacturing ionizing facilities; operators of NPPs and their maintenance sources-based equipment (e.g. JSC “NIITFA”, sub-contractors, some industrial and scientific JSC “SNIIP”, “EMI”, Ltd.) and joint ventures organizations from other industries: ROSATOM (JSC “Isotope Technologies”, Chinese-Russian State Corporation, JSC “FC NRS”, JSC “TVEL”, Joint Venture “Beijing CIAE — RIAR Radioisotope JSC “Rosenergoatom Concern”, JSC “VNIINM”, JSC Technology Co. Ltd.”). “Afrikantov OKBM”, JSC “NIKIET”, JSC “Gidropress” The full mixed uranium-plutonium fuel as well as customers from the USA, South Korea, fabrication cycle has been implemented Japan, China and France. at the RIAR’s pilot facility from the generation A wide range of radionuclides and ionizing of the initial uranium and plutonium oxides sources developed by JSC “SSC RIAR” is supplied to as-built fuel assemblies. In addition to both Russian and foreign markets. The key to the fabrication of the pilot batches of fuel consumers of RIAR’s radioisotopes are not only assemblies for the domestic fast reactors, the pilot radiopharmaceutical companies, healthcare facilities are used to carry out research providers and medical equipment manufacturers on the non-aqueous methods for the spent but also educational institutions and research nuclear fuel reprocessing, to fabricate JSC “SSC RIAR” Annual Report 2016 21

vibropacked fuel pins, to master closed fuel population and other consumers of the city cycle technologies and to carry out transmutation of Dimitrovgrad. The utilities consume not only of minor-actinides to involve them into the fuel all thermal energy produced by RIAR, but also cycle. 100% of cold and hot water supply. More The consumers of the power resources detailed information about the RIAR’ s produced by RIAR are not only the site facilities achievements in 2016 can be found but also different industrial companies, in Section 4.

1.3. Position in the Industry

The ROSATOM’s enterprises are known The key activities of JSC “SSC RIAR” are to implement two full process runs that are focused on the R&D provision of the ROSATOM’s G4-8 G4-8 related to the development, construction, enterprises in the field of the NPP fuel lifecycle operation and decommissioning of NPP, at the stages of its development, fabrication, production and use of nuclear fuel and handling operation and handling of SNF and radwaste of generated waste. (Fig. 1.3.1)

Fig. 1.3.1. Key process runs. In blue are lifecycle stages at which RIAR’s services are in demand

The Institute, being an important deterrence policy and nuclear and radiation experimental base, contributes to the achieve- safety of nuclear facilities, personnel, population ment of the ROSATOM’s strategic goals related and environment; development of innovative to the development of fuel technologies such nuclear technologies and broadening their as: effective provision of the national economy application areas. RIAR’s contribution with electrical energy produced at NPPs; to the achievement of the ROSATOM’s strategic provision of the national geological interests goals: and achievement of the leading positions  justification of materials and design for the national companies at the world’s components of various reactors, their market of nuclear technologies and services; performance and lifetime; new technical maintenance of national nuclear arsenals decisions aimed at the improvement of their at the level required to provide the nuclear 22 General Information

characteristics important for the NPP effective generated waste and reprocessing spent operation, including licensing abroad; nuclear fuel from nuclear ice-breakers; standards for monitoring and interpretation  development and tryout of the closed of facility conditions values at all stages fuel cycle technology; development of fuel of its lifetime. fabrication technologies for fast and low-power reactors; generation of experimental data In 2016, JSC “SSC RIAR” demonstrated on the properties of structural materials a stable dynamics in development holding for innovative power conversion facilities; a firm place in the industry (Fig. 1.3.2 and 1.3.3). development of technologies and arrangement At a time when the number of government of production of radioisotopes for scientific, contract decreased twice, the Institute increased technical and medical purposes; supplies of products and services by about 10 % as compared to the previous year. The share  scientific and experimental justification of isotopes supplies is increasing as well: in 2016 of technological and design decisions the increase in this activity made up 9 % for the refurbishment, upgrading, lifetime from the total scope of supply as compared management and decommissioning to 2015. of nuclear facilities, including the development of conventional technologies for handling

Fig. 1.3.2. Structure of JSC “SSC RIAR” supplies in 2016, %

The supply chain of JSC “SSC RIAR” is term. The interaction with counterparties is carried a system of relationships with counterparties out within the framework of a single policy related (suppliers, contractors and consumers), which is to the ROSATOM’s reporting and procurement an integral component of the business model systems (Fig. 1.3.4). The added value of the institute and has a direct impact of an enterprise is the aggregate of products, on the value added in the short, medium and long results of production activities and implementation JSC “SSC RIAR” Annual Report 2016 23

of projects aimed at achieving strategic goals, on the mission, values and strategic objectives increasing efficiency and competitiveness, as well of JSC “SSC RIAR”. This process is provided as economic, environmental and social mutual by internal resources (capital) and is influenced influence of the institution and stakeholders. by external factors (resources, risks The process of creating value added is based and opportunities).

G4-8

Fig. 1.3.3. Export of products and services in 2016, %

Fig. 1.3.4. Chain of JSC “SSC RIAR” supplies 24 Strategy Годовой отчёт АО «ГНЦ НИИАР» 2016 25

26 Strategy 2.1. Mission and Values

Mission of JSC “SSC RIAR” is to enhance marketability and effectiveness of ROSATOM’s activities in provision of sustainable development of Russia’s nuclear power engineering and economy

JSC “SSC RIAR”, being nowadays the largest of Russia’s and global nuclear technologies as well in Russia and in the world research center, as the implementation of the self-development provides science-intensive high-tech services projects. The main way for RIAR to achieve its on a wide range of irradiation and post-irradiation strategic goals is to solve a number of strategic experiments. It is also a key ROSATOM’s center issues on the development and strengthening producing high-tech innovative products being of key competences as well as on increasing in demand in different branches of industry the economic efficiency of the Institute (Fig. 2.1.1 and will remain as it is in the long-term. The basis and 2.1.2). Values global for ROSATOM are of RIAR’s operational activity is its participation extremely important for JSC “SSC RIAR” in the industrial projects aimed at the development (Fig. 2.1.3).

Fig. 2.1.1. Structure of JSC “SSC RIAR” export in 2016 JSC “SSC RIAR” Annual Report 2016 27

Fig. 2.1.2. Distribution of revenue

Fig. 2.1.3. ROSATOM’s values are RIAR’s values 28 Strategy 2.2. Strategic Tasks (Table.2.2.1)

Table 2.2.1 Achievement of strategic goals and key results for the year of 2016

Strategic goals Tasks to solve Results achieved

 Research and experimental support  Provision of nuclear and radiation  State Contracts were fulfilled of defense procurement. safety at all facilities, enhancement under the Federal Target Programs: of the production culture level as - R&D in justification of technical  Research and experimental well as the labor efficiency. justification of technical decisions decisions related to the MBIR reactor systems and equipment aimed at the enhancement of safety  Provision of financial stability and (26 mln RUB); and performance of nuclear reactors efficiency of the enterprise activities. of different types to provide - R&D in justification of design  Development of the experimental a sustainable development and technical decisions to establish potential of the RR fleet, facilities of Russia’s nuclear engineering. the poly-functional radiochemical and research infrastructure. complex (196 mln RUB);  Development of technologies  Development of the production - Technical upgrade of a 60MW and research and experimental infrastructure for a full fuel supply fast test reactor (40 mln RUB). justification of technical decisions cycle, SNF and radwaste aimed at the enhancement of nuclear  Portion of the outside orders made management. and radiation safety of nuclear facilities up 55 % that is 33% higher and effective management of SNF  Development of the production as compared to the year of 2013. and radwaste. infrastructure to provide  R&D results made up 39 % the innovative high-tech output.  Development of technologies of output in 2016. and research and experimental  Development of the scientific,  Portion of the export income justification and establishment marketing, financial-economical from the total one increased from 7 % of production of science-intensive and production potential to increase (2013) up to 43 %, including revenues unique innovative output. the high value added output. from isotopes supply increased  Development and strengthening  Development of human resources from 8 % up to 36 %. of key competencies, improvement to provide the fulfillment of promising  Revenues from sales production of the economic output of the current research tasks faced by the Russia’s for the first time exceeded activities of the Institute on the global nuclear industry, assistance 3 billion rubles, while the volume market and provision of sustainable in the regional development of proceeds from the R&D sale long-term development and arrangement of the conditions amounted to 2 billion rubles to engage highly-qualified employees JSC “SSC RIAR” Annual Report 2016 29

2.3. Business Model and Capitals

JSC “SSC RIAR” business model (Fig.2.3.1) creation disclosing the processes and results reflects a system of activities related to the of capitals transformation and their impact value creation and achievement of strategic on the stakeholders. goals using resources available. This is an overall description of the value added

Fig. 2.3.1. JSC “SSC RIAR” business model

To achieve its strategic goals, the Institute administration and amenity buildings, territory, possesses all the required reactor and non- skilled personnel to carry out world-level reactor experimental facilities, equipment, experiments (Table 2.3.1). The Institute also has 30 Strategy

logistics structure and suppliers to provide radioisotopes, fuel assemblies for fast reactors, the site with all technical and natural resources and supplies heat, electricity and water required for its activity. The Institute activities to Dimitrovgrad. By improving its experimental are based on the industrial-level nuclear capabilities and engineering infrastructure, technologies development projects, in which JSC “SSC RIAR” implements self-development the Institute participates to provide new projects to achieve the strategic goals. knowledge. Activities in the interest of Russian JSC “SSC RIAR” successfully uses enterprises as well as self-development both its internal and external capitals thus projects are usually financed in the frame demonstrating the effectiveness of its business of industrial-scale and federal target programs. model and high level of its integration Activities for foreign customers are done into the environment and active interaction under signed commercial contracts. In addition with the stakeholders. to research activities, RIAR produces

Table 2.3.1 Capital assets of JSC “SSC RIAR” and their efficiency in 2016

Capital Internal resources External resources Capital gain*

Gain of net assets made up 37 %. R&D and production R&D and production R&D and production Investment projects allocation made infrastructure infrastructure of subcontractors up 1.2 bln RUB

Revenue growth made up 24 %, Consolidated investment resource, labor efficiency made up 35 %. Financial and economic Financial resources Federal Target Programs assets, Net profit (loss) made up –90,3 mln RUB borrowed funds (loss reduction made up 612 mln RUB)

Number of registered patents Ideas and developments, Intellectual property, experience Intellectual for invention and useful models made results of intellectual activity and knowledge up 16 pcs., the increase is 100 %

Costs for the environmental Environment, Environment and consumed protection made up 15.3 mln RUB. Natural natural resources environmental resources Consumption of thermal energy decreased by 9 %

Average monthly salary growth Personnel, knowledge Personnel, gained knowledge Human made up 21 %. LTIFR made up 0. and skills gained and experience of subcontractors 815 employees were trained

Social relations, reputation Public acceptance of industry, of the organization Gross tax charges effective interaction Social at the domestic to the different-level budgets with subcontractors, and international target made up 797 mln RUB chain of supplies (Fig. 1.3.4) markets

* Сapital gain compared to the year of 2015. JSC “SSC RIAR” Annual Report 2016 31 2.4. Relevant Aspects G4-18 G4-19 G4-20 of Activity G4-21 G4-23

In accordance with the guidelines determination of the contents of the report in the field of public reporting, the Global and disclosure of information on the actualized Reporting Initiative (GRI, version G4), the process aspects. The initial list of significant aspects of preparing the concept of the report included of the JSC “SSC RIAR” activities was first determined questionnaires (November 2016) for stakeholder in 2015 in accordance with the methodology representatives and top-management (Fig. 2.4.1) of relevance assessment and is used in this annual of JSC “SSC RIAR” for the purpose of correcting report (http://www.niiar.ru/sites/default/files/riar_ and determining the essential aspects annual_report_2015small_0.pdf, P. 27–30). of the organization's activities for the subsequent

Fig. 2.4.1. Representatives of stakeholders and top-management

A rank map of the relevant aspects of activity and supplementing the list of GRI G4.0 aspects (GRI / G4 and IIRC) is given in Fig. 2.4.2. correspond to the following topics: Topics having a rank higher 0.5 for the stake- holders and top-management of JSC “SSC RIAR” 1 — economic efficiency; were admitted relevant and are reflected in the report. Topics marked in pink are 2 — market presence; recommended by the RIAR’s public reporting 3 — indirect economic effects; committee and described in detail in the report. Topics located in a square with coordinates 4 — purchase practice; from 0 to 0.5 on both matrix scales were not 5 — investment activities; recognized as significant and according to GRI guidelines are not mandatory for disclosure. 6 — key activities results; Unlike last year, the aspect of "Optimization 7 — quality and safety; of production processes" is recognized not only substantive, but also subject to disclosure 8 — optimization in detail. The figures in bold type highlighting of production processes; the own aspects of JSC “SSC RIAR” 32 Strategy

9 — innovative activities; 39 — assessment of human rights observance; 10 — materials consumption; 40 — assessment of human rights observance by suppliers; 11 — energy consumption; 41 — mechanisms to settle human rights 12 — water consumption; observance disputes; 13 — discharges; 42 — local community; 14 — effluent and waste; 43 — anti-corruption practice; 15 — transport; 44 — competitive barriers; 16 — conformity to ecological requirements; 45 — conformity to community requirements; 17 — bio-diversity; 46 — assessment of suppliers’ community 18 — products and services; interaction practices; 19 — ecology; 47 — mechanisms to settle disputes related 20 — ecological assessment of suppliers; to community interaction; 21 — mechanisms to settle ecological disputes; 48 — labeling of products and services; 22 — labor remuneration; 49 — conformity to products requirements; 23 — employment; 50 — infringement of native and low-numbered peoples’ rights; 24 — relations between employees and administration; 51 — state policy; 25 — health care and safety at a workplace; 52 — consumer’s health and safety; 26 — training and information; 53 — marketing communications; 27 — diversity and equal opportunities; 54 — international cooperation; 28 — assessment of the supplier’s HR practice; 55 — interaction during the report issuing; 29 — mechanisms to settle labor disputes; 56 — interaction with suppliers; 30 — equal labor remuneration 57 — corporative communications; for men and women; 58 — board of directors; 31 — personnel training; 59 — organizational management model; 32 — consumer’s privacy; 60 — inside monitoring and audit; 33 — investment practice; 61 — risk management. 34 — no discrimination; 35 —freedom of associations and collective The aspect relevance boundaries were bargaining; defined based on the rank map and with the account of the JSC “SSC RIAR” 36 — employment of children by a company top-management’s opinion. No new verbiage or subcontractor; of aspects given in the previous reports. 37 — forced and compulsory labor used All the given data match the previous ones. by a company or subcontractor; No changes in the scope and boundaries 38 — safety provision approaches; of aspects as compared to the previous reports. JSC “SSC RIAR” Annual Report 2016 33

Fig. 2.4.2. JSC “SSC RIAR” activity relevant aspects rank map 34 Management Efficiency Годовой отчёт АО «ГНЦ НИИАР» 2016 35 36 Management Efficiency

3.1. Members and Structure of the Governance Bodies

The supreme governance body of JSC of 26 December 1995 and by the Statute “SSC RIAR” is the General Shareholders Meeting. of the Board of Directors. In 2016 eighty eight The Charter of JSC “SSC RIAR” and the Federal meetings of the Board of Directors were held Law No. 208-FZ “On Joint Stock Companies” as in absentia (every member of the Board of 26 December 1995 govern the powers, of Directors sent the absentee feedback so there the procedure for convocation and holding was a 100 per cent attendance rate) to discuss the general Shareholders Meeting. In 2016 six two hundred ninety nine topics. The Board General Shareholders Meetings were held: of Director’s Report is given in Attachment 2. one Annual Shareholders Meeting and five Extraordinary Shareholders Meetings. The Board of Directors is a collegial managing body (Fig. 3.1.1) that is in charge of overall management, corporate development strategy, and exercises control over financial and economic activities and over the Sole Executive Body for JSC “SSC RIAR”. The Board of Directors occupies a central position in the corporate G4-34 management system. The number of members for the Board of Directors is specified in the Charter of JSC “SSC RIAR”. The Board of Directors of JSC “SSC RIAR” (Fig. 3.1.2, Tables 3.1.1 and 3.1.2) acts in compliance with the scope of its Fig. 3.1.1. Structure of the corporate governance competence stipulated by the Federal Law bodies No. 208-FZ “On Joint Stock Companies” as

Fig. 3.1.2. The members of the Board of Directors and the dates of their election JSC “SSC RIAR” Annual Report 2016 37

Table 3.1.1 Biographic profile of the Board of Directors for JSC “SSC RIAR”

Place of employment and positions held A member of the Board of Directors over the last five years

Alexey DUB  FSAEI NUST MISIS: since 2005 and to the present day — Head of Department (external secondary job).  JSC NPO TSNIITMASH: from 2005 until October 2014 — Director General. First Deputy Director General,  JSC “Science and Innovations”: from 2013 until October JSC “Science and Innovations” 2015 — Director General; since October 2015 and to the present day — Date of birth: 25 July 1960 First Deputy Director General. Academic background: higher, graduate from Moscow Institute of Steel Share in the share capital of JSC: 0 %. and Alloys (1983) majoring in study Equity share in the ordinary nominal shares of JSC: 0 %. of physical and chemical aspects of metallurgical processes There were no transactions related to acquisition and alienation of shares in the reporting year

Sergey KASHLEV  JSC “YUKOS EP” (Moscow): from May 2007 until September 2011 — Vice President for Economics and Finance.  JSC “Science and Innovations”: from March 2012 until January 2013 — Advisor;  From January 2013 until December 2015 — Director General, Deputy Director General for economics and Finance; JSC “Science and Innovations” Since December 2015 and to the present day — Director General. Date of birth: 23 February 1960 Academic background: Share in the share capital of JSC: 0 %. higher, graduate from Novosibirsk State University (1982) majoring in economic cybernetics Equity share in the ordinary nominal shares of JSC: 0 %. There were no transactions related to acquisition and alienation of shares in the reporting year

Nikolay KONDRATIEV  “Oil Company ROSNEFT”, LLC — Science and Engineering Center: from February 2006 until August 2011 — Director General.  ROSATOM State Atomic Energy Corporation: from August 2011 until November 2011 — First Deputy Head of the Block for Innovation Chief Executive Officer, Management. JSC “Science and Innovations”  JSC “Science and Innovations”: from November 2011 until October 2013 — Date of birth: 19 October 1960 Director General; Academic background: since October 2013 and to the present day — higher, graduate from Tomsk Polytechnic Institute (1982) Chief Executive Officer. named after S. Kirov majoring in engineering electronics Share in the share capital of JSC: 0 %. Equity share in the ordinary nominal shares of JSC: 0 %. There were no transactions related to acquisition and alienation of shares in the reporting year 38 Management Efficiency

Place of employment and positions held A member of the Board of Directors over the last five years

Vyacheslav PERSHUKOV  ROSATOM State Atomic Energy Corporation: from January 2011 until June 2011 — Deputy Director General — Director of Directorate for Science and Engineering; Since June 2011 and to the present day — Deputy Director General, Deputy Director General, Director of the Block Head of the Block for Innovation Management at for Innovations Management. ROSATOM State Atomic Energy Corporation  JSC “Science and Innovations”: from October 2015 until Date of birth: 20 May 1958 December 2015 — Director General Academic background: Share in the share capital of JSC: 0 %. higher, graduate from the Lomonosov Moscow State University (1980) majoring in mechanics Equity share in the ordinary nominal shares of JSC: 0 %. There were no transactions related to acquisition and alienation of shares in the reporting year

Alexander TUZOV  ROSATOM State Atomic Energy Corporation: from November 2010 until April 2015 — Project Manager; Deputy Director of the Innovation Management Unit — Head of Department Director of JSC “Science and Innovations” for Technological Development. and JSC “SSC RIAR”  JSC “Science and Innovations”: since May 2015 and to the present day — Director. Date of birth: 9 April 1971  JSC “SSC RIAR”: since October 2015 Academic background: and to the present day — Director. higher, graduate from Nuclear Power Engineering Institute (1994) majoring in power generation performance Share in the share capital of JSC: 0 %. and automatic control engineering Equity share in the ordinary nominal shares of JSC: 0 %. There were no transactions related to acquisition and alienation of shares in the reporting year

Ilya CHEREMUKHIN  “ENERGOPROMSBYT” LLC: from February .2008 until November 2011 — Head of Legal Office.  Moscow Office JSC “TGK-14”: from December 2011 until January 2013 — Head of Legal Office.  “ENERGOPROMSBYT” LLC: from February 2013 until April 2015 — Head of Legal Office. Head of Agency for Legal and Corporate Performance, JSC “Science and Innovations”  “ENERGOPROMSBYT” LLC: from February 2013 until April 2015 — Chief Expert, Government relations Department. Date of birth: 23 March 1975 Academic background:  JSC “Science and Innovations”: since July 2015 higher, graduate from Yaroslavl State University (1997) and to the present day — Head of Agency for Legal majoring in jurisprudence and Corporate Performance. Share in the share capital of JSC: 0 %. Equity share in the ordinary nominal shares of JSC: 0 %. There were no transactions related to acquisition and alienation of shares in the reporting year JSC “SSC RIAR” Annual Report 2016 39

Table 3.1.2 The Board of Directors JSC “SSC RIAR” does not have independent members in the Board of Directors in the meaning stipulated by the Code Members of the Board of Directors of Corporate Governance and recommended Age Men Women Total to be implemented in accordance with the letter of the Bank of Russia Aged 30 0 0 0 No. 06-52/2463, as of 10 April 2014 “Concerning and under the Code of Corporate Governance”. Aged 31 There are no committees within and through 2 0 2 the Board of Directors. the age of 50 The collegial executive body has Aged 51 and over 4 0 4 not been formed at JSC “SSC RIAR” during Total 6 0 6 the period under report.

The ongoing activities of JSC “SSC RIAR” and the managing company that is Joint Stock were managed during the period under report Company “Science and Innovations”. There is G4-35 by the Sole Executives Bodies: by Alexander some information about the Director of JSC A. Tuzov, Director of JSC “SSC RIAR” “SSC RIAR” in this Chapter.

Information about managing company Full name: Joint Stock Company “Science and Innovations”. Acronym: JSC “Science and Innovations” Director General: Sergey Kashlev Head office and legal address: 24 Bolshaya Ordynka St., Moscow, 119017, Russia Primary State Registration Number: 1117746621211. Individual Taxpayer Identification Number: 7706760091. Industrial Enterprise Classification Code: 770601001. Date of registration: 11 August 2011 Share in the share capital of JSC: 0 %. Equity share in ordinary nominal shares: 0 %. There were no transactions related to acquisition and alienation of shares in the reporting year. Some information about the Director General of JSC “Science and Innovations” is given in this Chapter.

Remuneration payable to the Director G4-52 and to the members of the Board of Directors The principle of forming remuneration The general shareholders meeting may resolve and salaries for the top management is similar to pay remuneration to the members of the Board to the principle of forming compensation to other of Directors and / or reimburse expenses arising out employees of JSC “SSC RIAR” (see Section 4.5. of discharging their duties as the members of the “Human Capital Management”). The amount Board of Directors at JSC “SSC RIAR”. The general of remuneration payable to the Director of JSC “SSC meeting of JSC “SSC RIAR” shareholders did RIAR” is determined in accordance with the terms not resolve to pay remunerations during the period and conditions of employment contract, which are under report. Therefore, no remuneration was subject of approval by the Board of Directors. paid to the members of the Board of Directors. 40 Management Efficiency

3.2. Corporate Governance System

For the corporate governance system, JSC “SSC RIAR” adheres to the policy of observing Regulatory framework recognized national and international standards 1. Civil Code of the Russian Federation. as well as corporate governance principles 2. Federal Law dated 26 December 1995 of the ROSATOM State Atomic Energy Corporation No. 208-FZ “On Joint Stock Companies”. (Fig. 3.2.1). The corporate governance framework should recognize rights and interests of all 3. Charter of JSC “SSC RIAR”. the parties involved and contribute to the success 4. Statute of the JSC “SSC RIAR” of the Company. Board of Directors.

Fig. 3.2.1. Basic principles of corporate governance

Plans for enhancing the corporate of corporate governance and submission governance system. Enhancement of the best available information about the general of the corporate governance system is primarily meeting of the JSC “SSC RIAR” shareholders. attributable to the protection of shareholders’ By enhancing the corporate governance system, rights and achieving equality of opportunities the Institute closely monitors all the changes in exercising their rights that is to say prevention in the applicable laws and advanced standards of any actions aimed at affected redistribution hereto. JSC “SSC RIAR” Annual Report 2016 41

G4-56 Principles and recommendations of the Corporate Governance Code

The Company has not yet formally adopted recommended to be implemented by the letter the Corporate Governance Code or any other of the Bank of Russia No. 06-52/2463 as of 10 April similar documents but JSC “SSC RIAR” provides 2014 “Concerning the Corporate Governance every opportunity to Shareholders to participate Code”. Some provisions of the Corporate in governing the Company and to receive some Governance Code are implemented information about the company’s activities under by the Company with due consideration the Federal Law dated 26 December 1995 for the legal status of the ROSATOM State Atomic No. 208-FZ “On Joint Stock Companies”, Federal Energy Corporation stipulated with the laws Law dated 22 April 1996 No. 39-FZ “On Securities and regulations of the Russian Federation Market” and in accordance with statutory providing for the concept of the unity regulations of the bank of Russia. The Company is of governance for all the nuclear enterprises. They committed to undertake its business in conformity are also stated in some local regulations pertaining with the basic principles and recommendations to the corporate governance. of the Corporate Governance Code that was

Reporting of the Board of Directors on developing the business priorities

High-priority areas of the JSC “SSC RIAR” Engineering Unit for ROSATOM State Atomic business were presented in the previous Annual Energy Corporation. Chapter 4 “Management Reports (http://www.niiar.ru/sites/default/files/riar_ of Capital and Performance” provides an overview annual_report_2015small_0.pdf) with the focus of the enterprise performance for 2016 concerning on fulfilling the needs of the Physics and Power all the areas of its business.

Transactions between interested parties and mechanisms for managing the conflict of interests

Transactions of JSC “SSC RIAR” subject to the approval of the Company’s which involved interest of the parties and are Governing Bodies were made based subject to the approval of the Board of Directors on the market values. In order the Board or the general meeting of shareholders pursuant of Directors and general meeting of shareholders to Article XI of the Federal Law No. 208-FZ can come to a decision and approve such 26.12.1995 On Joint Stock Companies” dated a transaction Pursuant to Article 83, Clause 7 26 December 1995 were entered into in full of the Federal Law No. 208-FZ “, a value of property conformity with the applicable Corporate (goods) or services is set by the Board of Directors procedures (see Attachment 3). Transactions in accordance with Article 77 of the same Federal which involved interest of the parties and are Law.

There were no dividends paid or attributed to the shares of JSC “SSC RIAR” in the year under report and over the last five years.

42 Management Efficiency

Changes in the size and structure of ownership

Share capital of the Joint Stock Company of JSC “SSC RIAR” via issuing 6 932 394 550 comprises a nominal amount of its shares (six billion nine hundred thirty two million three purchased by its shareholders. As on 1 January hundred ninety four thousand five hundred fifty) 2016 the share capital amounted to RUB additional shares through a closed subscription. 12 685 792 475 (twelve billion six hundred The Board of Directors approved the decision eighty-five million seven hundred ninety-two regarding additional issue of securities (Protocol thousand four hundred seventy-five) and was No. 334 dated 30 November 2015). The additional divided into 1 268 579 247ordinary registered issue of securities was registered by the Bank shares with a par value of RUB 1 each. of Russia on the 15th of December 2015 under state All the shares of the Company were issued as registration number 1-01-55411-Е-008D). In 2016 uncertified registered shares. Every ordinary the Company placed 4278135900 (four billion registered share of the Company confers two hundred seventy eight million one hundred on the shareholder owing it the same scope thirty five thousand nine hundred) shares coming of rights secured. The charter capital out from the additional issue of securities. of the Company did not change during The total number of shares placed by the company the period under report. 16963928375 (sixteen billion nine hundred sixty The general meeting of shareholders three million nine hundred twenty eight (Protocol No. 41 dated 28 November 2015) thousand three hundred seventy five) resolved to increase the charter capital (Table 3.2.1). Table 3.2.1 Distribution of issued shares, %

Distribution Shareholder As of 1 January 2016 As of 31 December 2016 Joint Stock Company “Nuclear Power Generation Complex” 49,8235 52,7803 The Russian Federation legally represented 50,1765 9,6972 by ROSATOM State Atomic Energy Corporation ROSATOM State Atomic Energy Corporation — 37,5225

So during the period under report Joint decreased its shareholding. The Russian Stock Company “Nuclear Power Generation Federation acquired shares of the Company with Complex” increased its shareholding but an ownership interest of 9.6972 %. ROSATOM State Atomic Energy Corporation

Projects aimed at promoting communication between top management and employees

Further work is under way to improve was presented in detail in the 2015 Annual Report communication and feedback between the top (http://www.niiar.ru/sites/default/files/pgo2015_ management team and employees. Such a system links_0.pdf). A website, radio, TV panels JSC “SSC RIAR” Annual Report 2016 43

and announcement boards are currently active conducted by the management team. Personnel means of communication at the Institute. A radio attendance days are organized on a regular basis station (thematic radio programs are broadcasted to keep the employees informed about three times a week, there are more than1 000 room the business performance and development speakers at the RIAR’s site) and website make prospects of the nuclear industry, nuclear it possible to extend the coverage up to 80 %. engineering division and enterprise as well as to as The JSC “SSC RIAR” website makes it possible well as to give employees a chance to talk to address a question to the Director in a special directly with the top management first section. It also runs a forum that is an additional and foremost. Altogether in 2016 more than 90 % way to ask a direct question to the top of top managers and functional managers took management and remain unidentified among part in such communication events (Fig. 3.2.2). the others. Personal appointments are regularly

Fig. 3.2.2. Personnel attendance days at JSC “SSC RIAR”

44 Management Efficiency

The overall PR-support of the RIAR’s sixtieth with the aim to promote development of corporate anniversary commemoration was one of the key culture and the spirit of cooperation objectives of the communication program for 2016. and to strengthen communication between The 60th Jubilee was a good occasion for a series the top, middle management and the staff. of image-building and publicity campaigns Honored retired employees, representatives and events targeted at forming public loyalty of the top management and interested parties to the nuclear power engineering as well as it was took an active part in these events (see a good occasion to implement some projects Section 4.5. “Human Capital”).

3.3. Auditing of Financial and Business Activities

An independent auditor and Department designated and approved as Independent for Internal Control and Audit at JSC “SSC RIAR” Auditor for statutory annual audit of JSC “SSC are responsible for oversight of financial RIAR” for the reporting period. and business activities. Pursuant to the resolution of the general meeting of JSC “SSC RIAR” shareholders (minutes of extraordinary general There is no audit commission (Internal meeting of shareholders No. 45 dated Auditor) at JSC “SSC RIAR”. 20 September 2016), Limited liability Company “Financial and Accounting Consultants” was

Information about independent audit company The head office and legal address: Myasnitskaya street 44/1, Bldg. 2 АB, Moscow, 101990, Russia Phone: (495) 737-53-53. Official website: http://www.fbk.ru. E-mail: [email protected]

The internal control and auditing and accounting data distortion. The internal control system is a combination of organizational and auditing system is one of the essential arrangement, methods and procedures for audit elements of the risk management system and monitoring adopted by the management at the enterprise which are attributable of economic entity as the mechanisms to the business transactions. JSC “SSC RIAR” has for consistent and efficient conduct of its such a system in place and it is made available business (business processes), which are by the Department for Internal Control and Audit implemented in order to reveal, correct (see Section 3.5. “Internal Control and Auditing and prevent substantial misdeeds (errors) System”). JSC “SSC RIAR” Annual Report 2016 45

3.4. Key Performance Indicators

The Improving performance management management system was adopted to improve process has been successfully implemented at JSC effectiveness of KPI setting and to evaluate their “SSC RIAR” since 2009. The key performance achievement. Performance appraisal is one indicators (KPI) system is an up-to-date of the integral parts of the personnel remuneration management tool. Its fundamental principle is policy at the enterprise (Fig. 3.4.1). The approved decompose strategic goals of ROSATOM State KPI data record is essential for bonus payment. Atomic Energy Corporation and managing Bonus payments are effected once a year upon company into financial and economic, business the fulfillment of key performance indicators but performance, staff and other indicators within the limits of payroll budget and with due of the enterprise business efficiency and individual consideration for the annual business performance goals of top management for a year term. The key of the enterprise. The amount of remuneration performance indicators ensuring economic, payable and its relevance to performance are environmental and social performance are clear and transparent. The established formalized into the key performance indicator remuneration procedure of the Company’s matrix of JSC “SSC RIAR” Director and и cascaded employees is based on the Regulation down or decomposed for lower level staff members on Remuneration of Labor in JSC “SSC RIAR”. in conformity with the key goals and relevant The amount of remuneration is based to functional burden. The key performance on the position held, actual level of KPI indicators are assigned to the managers at all levels fulfillments and hours worked (Table 3.4.1, in a mandatory manner. The SAP based personnel Fig. 3.4.2).

Table 3.4.1 Strategy matrix with the key performance indicators of JSC “SSC RIAR” Director for 2016

Fulfillment against Key performance indicator Strategic goal the target level, %

Free adjusted cash flow 120

Labor productivity 102 Increased share on the global Integrated index of foreign trade revenue 120 market Revenue from sale of innovative products 106 Total costs 100 Reduction of production cost Integrated index of new products 150 Creation of new products Personnel staffing plan 100 Staff capacity enhancement Improvement of staff motivation Engagement rate 120 and loyalty

LTIFR and nonoccurrence of incidence of falling from elevations Accomplished

No events with safety relevance of 2 and higher and accidents at Accomplished Operational conditions hazardous production facilities according to the INES scale Fulfillment of government orders, including state defense contracts Accomplished and contracts

46 Management Efficiency

Each key performance indicator is assigned indicators which are approved by the Strategic with a specific numeric value in the KPI matrix as Board at the ROSATOM State Atomic Energy to the total amount of bonus payment. In its turn Corporation The Institute does not have any the total amount of bonus payment is based information about remuneration to the Director on the annual amount of fixed salaries and target and to the members of the Board of Directors. amount of remuneration. Bonus payments are The total amount of remuneration paid in 2016 effected upon fulfilling the KPI threshold level. to the key management personnel such as deputy The KPI threshold levels are also specified directors as well as other executives delegated in the appropriate matrix. When noticeable with authority and enabled to take responsibility and significant achievements are made beyond for planning, administration and management the target level of performance, bonus payments at the Institute amounted to RUB 55.69 million. can be effected at a higher rate. Higher bonus An average KPI completion rate makes up factor can be additional motivational tool (150 %) 97.6 % (it was 87 % in 2015). to achieve the upper level of performance

Fig. 3.4.1. Governing principles of performance appraisal

JSC “SSC RIAR” Annual Report 2016 47

Sustainable development goals are the main occupational categories of the personnel addressed in the key performance indicators disaggregated by sex and age. of the supreme governing body and top management team. Sustainable development of the Company calls for high financial and production performance as well as for high social and environmental performance. One of the key performance indicators of the top management is to enhance human resources. It provides for implementing several projects which are targeted at improving career opportunities for professionals. There are also key performance indicators targeted at energy performance and development of innovative products. The release of Annual Report of JSC “SSC RIAR” is included in the matrix of key performance indicators for the Head of R&D Department. Table 3.4.2 provides some information about Fig. 3.4.2. Data on employees engaged in performance assessment Table 3.4.2 Main occupational categories of the personnel, %

Category Senior executives Professionals Workers Office staff

Men 18.04 32.41 49.33 0.22 Sex Women 8.70 61.79 27.35 2.15 Aged 30 and under 4.78 55.38 39.64 0.20 Aged 31 and through Age 15.63 42.15 41.55 0.67 the age of 50 Aged 51 and over 17.93 37.33 43.41 1.33

Motivation of top management

A motivation system of top management to the effective work, improved business and economic is based on the ROSATOM’s Unified Standard Remuneration System. An annual bonus payment depends on the fulfillment of key performance indicators. The amounts of bonuses to be paid are agreed by the managing organization. Bonus payments are mainly used as a reward. Key performance indicators provide a basis for making decisions. They are based on the assessment of the Company’s performance and targeted at pursuing its Fig. 3.4.3. Mr. Alexander Tuzov, strategic goals (Fig. 3.4.3). Director together with the Heads of Divisions Ms. Elena Zvir and Mr. Alexey Petelin 48 Management Efficiency

3.5. Internal Control and Auditing System

JSC “SSC RIAR” put in place the internal of JSC “SSC RIAR” undertakes inspections control and auditing system in order to enhance and auditing in conformity with the plan effectiveness of the corporate governance of control activities agreed with the ROSATOM system. Since 2015 the Department for Internal State Atomic Energy Corporation, as directed Control and Audit has been undertaking control. and ordered by the Sole Executive Body of JSC It currently employs seven staff members. “SSC RIAR” (Fig. 3.5.1). The Department for Internal Control and Audit

Fig. 3.5.1. Primary targets of the Department for Internal Control and Audit

In 2016 the staff members in accordance with the approved plan of the Department for Internal Control and Audit of arrangements agreed with the ROSATOM S03 undertook twenty scheduled inspections. State Atomic Energy Corporation as well as There were thirteen inspections conducted under the decision of the governing board, in the format of expert analysis and analytical as ordered and directed by the Sole oversight, four of them were routine Executive Body of the Company; inspections and another three were audits.  Further introduction of regulatory The staff members of the Department documents elaborated by the ROSATOM for internal Control and Audit participated in two State Atomic Energy Corporation internal investigations pursuant to special within the framework processes “Internal orders of RIAR’s Director and in four centrally- control and internal auditing” and “Auditing managed audits initiated by the ROSATOM activities”; State Atomic Energy Corporation against  Enhanced training of the staff employed the companies, which come under in the Department for Internal Control the ROSATOM governance (“Dimitrovgradskiy” and Audit, exchange of professional experience Branch FSUE “National Operator for Radioactive and expertise with the associated departments Waste Management”, JSC “NIIAR — Generatiya”, at the ROSATOM State Atomic Energy JSC “Scientific Research Institute of Chemical Corporation and its subordinate institutions Technology”, JSC “SSC RF TRINITI”) (Fig. 3.5.2). (Table 3.5.1); Plans for 2017:  Internal audit of public reporting process  Internal audit of budget resources allocation for compliance with the requirements within the framework of the federal targeted applicable to the public reporting policy programme “Development of nuclear-weapon of ROSATOM State Atomic Energy Corporation complex in the Russian Federation and internal regulatory documents of JSC “SSC for the years 2007–2015 and for the period RIAR” for public reporting followed by issuing until 2020”; the expert summury report (see  Auditing of financial and business operations, Attachment 7). procurement and contract-related activities JSC “SSC RIAR” Annual Report 2016 49

Fig. 3.5.2. A number of audits and their outcomes for the years 2014–2016

Table 3.5.1 Enhanced training and development of the staff employed in the Department for Internal control and Audit in 2016

Training course A number of staff trained

Administration of procurement process in compliance with the requirements of Federal laws 2

Compliance officer 5

Contracting for Federal and municipal Procurement 2

Anti-corruption

There is a special office at JSC “SSC RIAR” and prevent the leakage of business privileged that is in charge of assets security (Fig. 3.5.3) data. The actual staffing is five people. S04 in order to enforce a range of measures to prevent Internal regulations, policies and procedures unlawful actions within the Company, minimize were worked out as part of the Unitary Industry- the risk of harm and damage, the risk of assets loss Specific Anti-Corruption Policy pursued 50 Management Efficiency

by the ROSATOM State Atomic Energy Corporation 3. Procedure for coordination of actions and its subordinate institutions and as part between the JSC “SSC RIAR” employees of standard procedural recommendations with the law-enforcement agencies for combating on the corruption risk assessment for the ROSATOM and preventing corruption. institutions. These documents are available 4. Procedure for employees of JSC “SSC RIAR” on the RIAR’s website in the section entitled to inform the employer about the address facts “Anti-corruption efforts”: for the purpose of inducement to make 1. Anti-bribery and anticorruption policy of JSC corruption, consideration and verification of such “SSC RIAR”. complaints and their filing. 2. Regulation on establishing relationship with contracting parties in the course of foreign economic activities.

Fig. 3.5.3. Main directions of the Assets Security Office

The same section of the website has with the information constituting the RIAR’s trade addresses and other details of contacts where secrets. any employee of ROSATOM State Atomic Energy 2. The list of knowledge, data and documents Corporation and its affiliated companies who has constituting the RIAR’s commercial secret. knowledge of fraud and theft can communicate 3. Guidance document on ensuring protection this information via communication channel of knowledge, data and documents constituting “Hotline” to prevent corruption and fraud the RIAR’s trade secrets. in nuclear . 4. Guidance document of the expert committee A major part of work against corruption on the trade secret protection. and its prevention is to exercise control over management of procurement activities. The staff 5. Regulation on conducting security inspections members of the Assets Security Office are with a view to ensuring maintaining the regime entitled to check the veracity of information of business confidentiality for inside intelligence declaring earned income, property status (official information of restricted circulation and related commitments that is submitted classified as restricted access information) by certain categories of officials, carry out at JSC “SSC RIAR”. an expert appraisal of trustworthiness The staff members of the Assets Security and business reputation for some staff members office approved three hundred fifty nine (359) involved in procurement in order to reveal procurement procedures and three hundred sixty affiliation of persons and entities as well as eight (368) existing procurement contracts potential conflicts of interest. The following during the reporting year. However, one regulations, rules and requirements were worked procurement procedure and its related contract out by the Assets Security Office to ensure safe amounting to RUB 56, 9 million were keeping and to safeguard knowledge, data disapproved due to the procurement and documents constituting the Company’s trade irregularities revealed. Disciplinary measures secret: were taken against nine staff members 1. Guidance document on registration, recording, for unsatisfactory administrative performance retention and keeping of data carriers and violation of labor discipline as a result of these inspections. JSC “SSC RIAR” Annual Report 2016 51

3.6. Risk Management G4-2 The risk management policy of the Institute  Allocation of risk management responsibility is targeted at enhancing sustainability of its area for Institute’s employees at an appropriate development. It is governed by relevant regulatory level of management. documents of the ROSATOM State Atomic Energy The risk management policy Corporation. They are used as a basis to put in place of the Institute is based on the principles unified requirements for analysis of risks affecting and methods described in the corporate risk achievement of financial and business performance management system. It provides for consistency indicators. Analysis of risks provides for their of management processes commencing identification, assessment, preparedness evaluation with review procedures that encompass risk and elaboration of risk management plan including factors including further elaboration monitoring. One of the key instruments and implementation of risk management the Institute uses to realize its strategy and achieve procedures with the focus on minimization of risks relevant objectives is to establish effective risk and completing with their testing. These activities management and internal control systems. are aimed at timely identification of the events The primary goals and objectives of the risk which could impact adversely management process are as follows: on the achievement of objectives  Identification of risks and their mitigation, and at adequate responding to them. provision of information and reporting The existing measures of risk mitigation are about risks to make managerial decisions assessed as to each of the identified risks, with a view to responding the strategic including procedures of internal control and their objectives of the Company; adequacy for restraining a residual risk level. In order to neutralize some risks, protection  Promotion of process continuity (stability) measures are put in place as they are more directly through identification, assessment related to the production plan. Possible algorithms and mitigation of threats which can affect of actions are available if any risk arises. the performance of the Institute; Risk management is done and supervised in the divisions and units of the Institute within the assigned area of every responsible.

Operational risks

Internal business processes are among management activities. The risks attributable the targets of the operational risk as they affect to business activities of the Company mostly do not the sustainable development of the enterprise require elaboration of additional measures (Table 3.6.1). In 2016 responsibility was assigned to mitigate them. for implementation of financial improvement plan The medium-term plans are as follows: in accordance with the action plan for financial  Work targeted at developing the risk stabilization at JSC “SSC RIAR” to mitigate such risks. management system and its integration The risk management or risk mitigation activities in the existing management process is to be are consistent with the objectives of short-, continued; medium- and long-term planning in support  Identification, assessment and monitoring of enterprise development and with the main of risks in the process groups “Budgeting” and “Medium-term planning” in order lines of fiscal policy at the Institute (Fig. 3.6.1). to analyze the impact of unmanageable risks The risks were classified according to their (both manageable and unmanageable risks) significance (materiality) and likelihood (Fig. 3.6.2) with a view to take decisions on necessary risk 52 Management Efficiency

on the financial figures, control over risk  Assessment of risks as a part of measures management activities; under the financial improvement plan at the enterprise.

Fig. 3.6.1. Key risk management activities

Fig. 3.6.2. Risk impact assessment JSC “SSC RIAR” Annual Report 2016 53

Table 3.6.1 Risk management practice at JSC “SSC RIAR”

Risk Risk factor Risk management activities

Risk of exchange losses Volatility of exchange rate  Analysis of contracts concluded and future possible contracts.  Costs optimization (reduction)

Operational risk Uncertain and unforeseen difficulties  Introduction of the state-of-the-art in the work process (for instance, technological risks, production methods. risks of failures, accidental risks, risks associated  Modernization and technical retrofitting with the repair time prolongation etc.) of radiation hazardous facilities.  Mitigation (elimination) of hazards

Risk of underemployed Employment of production facilities is directly  Financial and industrial support of innovative capacities related to the demand of the Customers: products during the market slump. a decrease in demand leads to the risk  Increased production and sales of industrial of underemployed capacities grade products. and underemployment of the personnel  Sale of non-core property

Risk of quality Unconformity of quality to the assigned quality  Maintenance of the quality standards or quality specifications as to products, management system. accomplished work and services rendered  Evaluation of the Customer’s satisfaction

Risk associated  Setback of the worldwide / Russian financial  Identification of risk owners and defining with the increase and monetary system. areas of their responsibility. in the cost of services  Changes in the charge rates for public utilities  Implementation of programs targeted and services, of shipping companies etc. at energy saving and energy efficiency enhancement.  Increase of the minimal subsistence wage etc.  Integration of the ROSATOM industrial system  Failures in the work processes. to improve processes.  Lower level of equipment capacity utilization.  Optimization of production areas.  Technological obsolescence  Headcount optimization

Risk associated Changes in the pricing policies of Contractors provided  Invention of new market segments. with movements that the contracts concluded for input supplies enable  Expansion of the range of products in market prices reconsideration: escalation in prices for any particular and services rendered for procured materials resources leads to incidental expenditures and output products due to changes in economic situation

Note █ — higher impact of the risk compared to 2015.

54 Management Efficiency

Legal risks

JSC “SSC RIAR” undertakes its business destruction weapons. It also observes related in conformity with the regulations and standards recommendations of supervisors and regulators as well as with due consideration for changes at the international and national levels. in the Russian legislation in force. With this All the contracts to be entered are subject objective in view, JSC “SSC RIAR” constantly to the approval by law compliance monitors changes in the RF legislation in force and enforcement office at JSC “SSC RIAR”. and jurisdiction of its presence in the field Independent consultants are engaged in some of the nuclear energy use, marketing, cases also. export control and nonproliferation of mass

Social risks

Adhering to the principle of high corporate specific policy of ROSATOM and its subordinate social responsibility, JSC “SSC RIAR” places companies. The fundamental principles of social particular importance on social sustainability. policy in the nuclear sector are its transparency, That is why identification and reduction of social availability and openness. The priority activities risks impact to the maximum extent possible of social policy have been incorporated constitute a priority direction of the Institute’s in the corporate social programs of the Institute strategy. In order to put in place unified approaches (Fig. 3.6.3). to social protection of the personnel, the enterprise has been successfully pursuing the Unified industry-

Fig. 3.6.3. Corporate social programs pursued by JSC “SSC RIAR”

JSC “SSC RIAR” Annual Report 2016 55

Most of potential social risks could education institutions and, respectively, be provoked and could lead to rise of tensions in a number of recent graduates; location due to dissatisfaction of the personnel of the Company in the single-industry town with a motivation and social support system. where there are serious restrictions in making To ensure management of social risks and sound optimal decisions on staffing etc.). A short-coming administration of the ongoing corporate social of high-skilled and experienced personnel programs, a Trade Union Agreement has been and impossibility to involve them in new projects concluded between the Company and the trade including innovative ones could have union organization. It is a subject of regular an undesirable effect on the achievement modification and updating. of strategic objectives of JSC “SSC RIAR”. In order A number of factors attributable to prevent occurrence of such a risk, the Company to the human resource risks are beyond the area consistently pursues programs oriented towards of the Company’s influence (for instance, decrease youth and mentorship (Fig. 3.6.4) (see Sections 4.2 in a number of graduates from schools and higher “Intellectual Capital” and 4.5 “Human Capital”).

Fig. 3.6.4. Parade dedicated to one of the social projects

Insurance

JSC “SSC RIAR” widely employs insurance contracts were concluded during the period practice to conduct the risk management under report to ensure sustainable functioning practice. A number of different insurance of the enterprise (Fig. 3.6.5 and 3.6.6). 56 Management Efficiency

Fig. 3.6.5. Types and extent of insurance in 2016 RUR000’s

Fig. 3.6.6. Types of insurance against civil liability at JSC “SSC RIAR”

Risks related to labor protection Rates of work-related injuries to ensure occupational health and safety and occupational diseases have a significant of the personnel. There is also the occupational effect on both the economic and social safety management system targeted components of the JSC “SSC RIAR” business. at preventing work-related injuries The measures aiming at prevention of work-related and occupational diseases as well at improving injuries and occupational diseases make it possible working conditions for the employees. to increase labor productivity efficiency and all The seconded staff and the personnel these measures in their entirety contribute of Contractors’ entities who are involved to higher economic benefit of JSC “SSC RIAR” in activities at radiation hazardous areas (Fig. 3.6.7). The Institute has in place Unified and facilities could undergo individual radiation industry-specific labor protection policy exposure control. When JSC “SSC RIAR” enters of the ROSATOM State Atomic Energy Corporation into subcontracts, obligations and commitments and its subordinate institutions that sets goals, of subcontractors in terms of compliance tasks and the main course of actions for RIAR with occupational health and safety standards JSC “SSC RIAR” Annual Report 2016 57

are specified. These subcontracts also provide The purposeful and goal-oriented activities for formalizing relevant agreements. Occupational targeted at occupational health and safety show safety questionnaires are also filled up. evidence for reduction of risks associated with labor The Company together with the representatives protection and occupational safety of Contractor undertakes regular inspections of the enterprise during the recent years (see to ensure the compliance with the occupational Section 4.7. “Occupational Health and Safety”). safety requirements at the worksites.

Fig. 3.6.7. Primary objectives and tasks of the occupational safety management system at JSC “SSC RIAR”

Nuclear and radiation safety risks

The primary goal of JSC “SSC RIAR” is at the site. It is operated in conformity with laws, to ensure trouble-free, safe and sustainable codes, regulations and requirements of the Russian operation of its nuclear and radiation-hazardous Federation currently in force, sanitary regulations facilities. It conducts performance monitoring and standards, specifications, rules, guidelines, systematically and undertakes engineering instructions and other related documents: arrangements to ensure trouble-free operation  External and internal radiation exposure of research reactors and nuclear hazardous sites. monitoring of the personnel is carried out All activities are carried out in full compliance in accordance with National Radiation with the relevant regulations and with due Safety Standards NRB-99/2009, Basic consideration for changes in the RF legislation Sanitary Regulations for Radiation Safety in force. In there were no accidents at nuclear OSPORB-99/2010, and procedural guidelines hazardous sites at JSC “SSC RIAR”. All the research MU 2.6.5.028-2016; reactors demonstrated accident-free operation  Radioactivity discharge monitoring is also. conducted in compliance with the Standards The radiological safety system was for radioactive discharge control subject developed and has been operated by JSC “SSC to unexceptional non- exceedance RIAR” to manage radiation hazard risks incurred of atmospheric emission limits; by local residents and personnel because  Preparedness of special units of response of nuclear operations and facilities located force is maintained to prevent, confine 58 Management Efficiency

and mitigate accidents and emergencies Every year RIAR publishes its annual report with the involvement of command authorities, comprising data on individual and collective doses command centers, communication of internal and external radiation exposure and announcing systems, emergency response of the personnel and the public, radioactive release forces and equipment, goods and financial monitoring data and other related information. reserves. The resultant report is used as basis to work The radiological safety system is out necessary arrangements targeted at nuclear constantly being improved. For instance, JSC and radiological safety enhancement. “SSC RIAR” adopted new guidelines for radiation The following special arrangements are undertaken safety in 2016 which had been worked out by to mitigate the risks attributable to operation the Federal Medical and Biological Agency. of nuclear facilities: The following criteria can be a good evidence  Projects focused ion retrofit and upgrading that activities undertaken by JSC “SSC RIAR” do not of process equipment; produce any strong impact on the personnel, local  Adherence to existing regulatory documents residents and environment: related to production processes  Main occupational radiation exposure limits and operational procedures specific were not exceeded in 2016; to operation of nuclear facilities, storage  Adherence to specified limit values of nuclear and radioactive materials, for radioactive emissions (in 2016 radioactive and radioactive waste management emissions of nuclear facilities were reduced; (Fig. 3.6.8). radiation exposure of the personnel, local The achieved level of nuclear and radiation residents and environment as a result safety is satisfactory as evidenced by the nuclear of activities undertaken by the enterprise was safety commission of the Company, commission almost three times lower compared to natural of General Inspectorate under the ROSATOM State exposure); Atomic Energy Corporation and medical inspection  There were no events attributable to operation of Regional Medical Setting No. 172 of nuclear facilities rated at level 1 and higher under the Federal Medical and Biological Agency. on the INES scale.

Fig. 3.6.8. Solid radioactive waste storage facility

In 2016 the radioactive release monitoring data showed evidence for a 6 % reduction of radioactive releases as compared to the same data for 2015.

JSC “SSC RIAR” Annual Report 2016 59

Risks attributable to investment projects

Guidelines and regulations on risk to activities related to investment projects management worked out by the ROSATOM State and their attributable risks (Figure 3.6.9 Atomic Energy Corporation are applied by RIAR and 3.6.10).

Fig. 3.6.9. Major risks attributable to investment projects of JSC “SSC RIAR”

Fig. 3.6.10. Risk management / risk mitigation activities

60 Management Efficiency

3.7. Quality Assurance

The quality management system of JSC management concept stated in International “SSC RIAR” is intended to ensure management quality management standards. The integrated of administration performance, scientific work, quality management system is under the direct business concept and engineering work supervision of the Chief Engineer who is RIAR’s at the Institute and is targeted at meeting tom management representative in charge the Customer’s requirements (Consumer) of quality and ecology. As to the quality policy to the full extent with a view to provide guidance, it is provided by the Quality the desired quality within the fixed timeframes as and System Engineering Department that is well as safe performance. Quality management subordinate to the Chief Engineer. at the enterprise is based on the quality

Quality assurance policy

Senior executives of RIAR worked out Launching into Manufacture. Quality management the quality management policy. The institute has Systems. General Requirements”. This work implemented and maintained the quality resided in the following: management system as an instrument to embody  Measures focused on the proper performance the policy as to design engineering and further enhancement of the integrated and development for research and development quality management system for 2016; work in the field of nuclear energy use, production  Internal auditing of the integrated quality and supply, and service rendering to provide timely management system; response to the needs and expectations of its  Supervision audit of the quality management customers. Its timely applicability is verified system for compliance with the requirements annually when the performance of the quality of Standard GOST RV 0015-002-2012»; management system is analyzed. The quality assurance policy was made up to date in 2015.  Supervision audit of the integrated quality The integrated quality management system is management system for compliance applicable to the design engineering, fabrication with the requirements of International and supply of fuel elements, fuel assemblies, Standards ISO 9001:2008 and ISO 14001:2004; radiochemicals and radionuclide sources. It also  Audit of the quality management system extends to research and development work on the part of JSC “TVEL”. in the field of nuclear energy application Standard GOST RV 0008-002-2013 and complies with the requirements of ISO 9001 “State System of Standardization and ensuring (GOST ISO 9001) and ISO 14001 (GOST R ISO 14001). Traceability of Measurements. Certification of test RIAR continued its work targeted at proper equipment intended for conformity assessment performance and further improvement of national defense products. Organization of the certified quality management system in 2016 and procedure for the conduct” was put in place (quality management system, environmental during the period under report. management system) to bring it in conformity In 2017 RIAR shall continue replacing with the requirements of International Standards and implementing recent versions of Standards ISO ISO 9001:2008 “International Requirements 9001:2015 (GOST R ISO 9001:2015), ISO 14001:2015 to Quality Management Systems” (GOST ISO (GOST R ISO 14001:2016) including the work done 9001-2011), ISO 14001:2004 “Environmental under the projects targeted at the management Management Systems. Requirements and Guidance system enhancement which were launched for Use” (GOST R ISO 14001-2007) and State Military in the year under Report (see Section 3.9 Standard GOST RV 0015-002-2012 “System “Production Management”). for Military Equipment Development and JSC “SSC RIAR” Annual Report 2016 61

Customer satisfaction PR5

Activities relating to assessing customer and Assessment of Customers’ Satisfaction”. satisfaction, methods and frequency of data To assess customers’ satisfaction, questionnaires acquisition as well as the data analysis method are of two types were distributed following governed in conformity with the Institute’s the results of 2016: R&D quality assurance Standard STO DP 086-410-2015 “Integrated Quality assessment and quality assessment of products Management System of JSC “SSC RIAR”. Monitoring (Figure 3.7.1 and 3.7.2).

Fig. 3.7.1. Customer satisfaction with products and R&D

Averaged customers’ satisfaction with services 80 %

Averaged customers’ satisfaction with products supplied 85 %

General averaged customers’ satisfaction level 82.5 %

62 Management Efficiency

As evidenced by the questionnaire survey, opinion, the information about services rendered 100 % of the Companies who use services by the Company and its products is available. Apart and products of JSC “SSC RIAR” consider RIAR from the Russian customers, the questionnaire a reliable supplier and they have plans to continue survey was conducted to assess satisfaction cooperation under the contracts. Moreover, they of foreign customers’ within the frameworks are ready to refer other consumers to RIAR. In their of R&D projects (Fig. 3.7.3).

Fig. 3.7.2. Averaged customers’ satisfaction, % Fig. 3.7.3. Assessment of foreign customers’ satisfaction

3.8. Procurement Management

Procurement activities of the Institute the Company provides information about at its own costs and expense and with the use procurement on the official websites EC6 of extra-budgetary funding are governed pursuant on the Internet: government website to the Federal Law #223-FZ “On Procurement of the Unified procurement information system of Goods, Works and Services by Certain Legal (www.zakupki.gov.ru) and dedicated website Entities” as of 18 July 2011. The ROSATOM State for placing purchase orders for goods, work Atomic Energy Corporation approved Unified and services for the needs of ROSATOM State Industry-Specific Procurement Standard under this Atomic Energy Corporation (www.zakupki. Federal Law. The Procurement standard was rosatom.ru). The information regarding adopted by JSC “SSC RIAR” as Procurement the competitive procurement procedures as well Regulations. The details can be found at the official as the results of procurement procedures is EC9 website of the Company (http://niiar.ru/?q=posta posted by the Company at the electronic market vshikam). The fundamental principles place dedicated and authorized by the ROSATOM of procurement activities at JSC “SSC RIAR” are State Atomic Energy Corporation that makes it given In Section 2.8 “Procurement management” possible to engage a maximum number of bidders. in Annual Report for the year of 2014 The majority of competitive procurements are (http://niiar.ru/sites/default/files/pgo2014_ln_2906 available on the electronic trading platforms of LLC 2015_c_ssylkami_0.pdf). To promote openness “Fabrikant”. and transparency of procurement process, JSC “SSC RIAR” Annual Report 2016 63

In 2016 a share of competitive bidding via e-procurement made up 100 %. A share As a result of open competitive bidding of the contracts made between the Institute RUB 47 860.433 thousand were saved in 2016 and small- and medium-sized business entities making up 7.75 % of the planned procurement for supply of products, work execution price. and rendering services was equal to 38.95 % of the total number of contracts entered in 2016 of which a share of contracts to which parties were small- and medium-sized business entities only made up 22.3 %. A local purchase rate was Plans for 2017: equal to 13.6 % (procurement orders for goods,  To increase the rate of open competitive work and services which are entered bidding by reducing a single supplier purchase with the suppliers geographically located rate; in the administrative district of the Company)  To increase the rate of timely competitive according to the results of procurement process bidding procedures up to 95 %; in the year of 2016 in relation to the total value  To keep small- and medium- size business of the contracts entered. entities in procurement at the level no less than 18 % of the total annual value of contracts entered of which at least 10 % are In 2016 JSC “SSC RIAR” entered the contractors representing small- into 368 contracts within the framework and medium-size business entities. of annual procurement plan for a total amount of RUB 1 399 830.320 thousand.

3.9. Production Management Enhancement of production management system

The major projects launched by JSC “SSC  Further development and enhancement RIAR” in the year under report to enhance of the integrated quality management the management system were as follows: system at JSC “SSC RIAR” with a view  Supervisory auditing: to implement a unified quality policy  Certified quality management system of JSC of the ROSATOM State Atomic Energy “SSC RIAR” for compliance Corporation, to update and integrate with the requirements of State Military regulations and requirements relevant Standard GOST RV 0015-002-2012; to the management system;  Certified integrated quality management  Elaboration and enforcement of quality system for compliance assurance programs under the operator's responsibility including the programs on NPP with the requirements of International life extension in conformity with Safety standards ISO 14001:2004 (GOST R ISO Rules and Regulations NP-090-11 14001-2007) and ISO 9001:2008 (GOST ISO “Requirements for Quality Assurance Programs 9001-2011); of Nuclear Facilities”. 64 Management Efficiency

In 2017 JSC “SSC RIAR” will continue in conformity with the plan of actions targeted to enhance integrated quality management at its proper performance and improvement.

Implementation of process management methodology and tools

JSC “SSC RIAR” is consistently improving  STO KP 086-415-2015 “Integrated Quality the production management system in order Management System of JSC “SSC RIAR”. to perform research and development, render Operation of Nuclear Facilities”; services as well as to provide timely response  STO KP 086-416-2016 “Integrated Quality to expectations of its customers. In accordance Management System of JSC “SSC RIAR”. with the requirements of ISO 9001:2008 (GOST ISO Human Resources Management”; 9001-2011) and GOST RV 0015-002-2012, RIAR has identified the processes that should be put  STO KP 086-418-2015 “Integrated Quality in place for the proper performance of the quality Management System of JSC “SSC RIAR”. management system (management, primary Production of Radionuclides”; and supporting processes), worked out  STO KP 086-419-2014 “Integrated Quality and modified its existing standards: Management System of JSC “SSC RIAR”.  STO KP 086-413-2015 “Integrated Quality Mid-Term Planning. Budgeting”; Management System of JSC “SSC RIAR”. R&D.  STO KP 086-421-2015 “Integrated Quality Reactor Materials Science”; Management System of JSC “SSC RIAR”. R&D.  STO KP 086-414-2015 “Integrated Quality Irradiation Testing”; Management System of JSC “SSC RIAR”.  STO KP 086-422-2016 “Integrated Quality Nuclear Fuel Fabrication”; Management System of JSC “SSC RIAR”. R&D. Radiochemistry”.

Enhancement of production efficiency

The production system of ROSATOM State of projects was approved for a time period of 2016– Atomic Energy Corporation is an industry-specific 2017. A half of a total of thirteen selected projects project targeted at developing a multi-purpose was fully accomplished in 2016 and their targets management system for integrated optimization were attained. These projects were focused of production and management processes on optimization of the following processes: at ROSATOM enterprises based on the best national  Payroll cards are provided by the Institute and foreign practices. It is also intended and salaries are paid out to the employees for enhancing performance at nuclear enterprises, by loading payments onto them; including cost reduction and for increasing  Allocation of value-added tax on the acquired productivity to achieve the level of Russian property, plant & equipment assets; and foreign competitors. To enhance efficiency of the processes, improve their transparency  Input of data on certification and assessment and get economic benefit in the finance of workplaces according to working and economics sector of JSC “SSC RIAR”, a list conditions; JSC “SSC RIAR” Annual Report 2016 65

 Liquidity management and cash flow project to optimize collection of low-level solid budgeting; radioactive waste at its site. This project is  Depositing cash in deposits of JSC targeted at shorting timing of the process, “AtomEnergoProm” and in bank accounts enhancing its quality and safety, ensuring of trade banks; regulatory compliance with requirements  Budgeting of capital expenditures and documents governing solid radioactive and medium-term forecasting of investment waste management. This project will allow activities. avoiding punitive duties and reducing It is expected that some projects will have expenditures on payment of charge rates further development in 2017. To ensure higher attributable to the resultant waste management level of production safety in the year under (more than 8 million rubles), their removal report, JSC “SSC RIAR” has launched a new from the storage facilities and further processing.

3.10. Investment Management

Investing activities of the Institute are activities involving planning, implementation, conducted in conformity with the unified industry- motivation, control and management specific policy of ROSATOM State Atomic Energy of the investment program are targeted at the Corporation and its subordinate companies. expected output of investment challenge within a The primary goal is to maintain and enhance limited time frame, budgeting and in the presence productive capacities as well as to strengthen of risks. In 2017 the processes of investing are scientific expertise at the Institute (Fig. 3.10.1). expected to be improved within the regulatory RIAR’s investing activities are maintained framework. Automation and management by managing the investment programs throughout accounting have been also envisaged among their life cycle (Fig. 3.10.2 and 3.10.3). These these tasks.

Fig. 3.10.1. Major tasks and objectives of investment management

66 Management Efficiency

Fig. 3.10.2. Volume of investments of JSC “SSC RIAR” made in billion rubles

Fig. 3.10.3. Volume of investments of JSC “SSC RIAR in 2016 per projects

3.11. Property Management (Fig. 3.11.1) As of December 31, 2016 RIAR had 105 land plots with a total area of 3 155.76 76 hectares, The income of the Institute from the from which in the actual land use are: property transferred into lease amounted to  92 land plots with a total area 126.7 million rubles in the year under report of 242.29 hectares belonged to the Institute including 71.6 million rubles charged against on the property right; the debtor for the property rented out in 2014–  13 land plots with a total area of 2899 hectares 2015. were in use of the Institute on a leasehold basis and continuous (term-less) use. In 2016 the lease of three land plots was terminated due to the sale of real property The non-core property such as a storage facilities located on them. building was sold at the auction. The income received amounted to 2.2 million rubles. The ownership of non-core property such as JSC “SSC RIAR” Annual Report 2016 67

deadhead asset (greenhouse ground) was As of 31 December 2016, eight hundred transferred to municipal authorities of Ulyanovsk thirty nine (839) real estate objects belonged region. The indirect economic benefit amounted to RIAR under the property right. Its property to 1 million rubles at an annualized rate. right to all the objects of real estate has been JSC “SSC RIAR” received US$ 1.28 million and RUB registered. 7.28 as a share of profit where it has the co- ownership share.

Fig. 3.11.1. The main objectives of the property management policy

3.12. Public Stance as to Sustainable Development

The sustainable development of JSC “SSC of the Institute’s business and its enhanced RIAR” is understood to mean consistent work performance, social benefits and guarantees for its of economic, social and environmental implications employees are the main reference points to identify contributing to the strategic objectives of Institute the key performance indicators (see Section 3.4 and its further overall development. “Key Performance Indicators”). The key The economic pillar of sustainable performance indicators are set up by the relevant development in addition to efficient utilization departments of the ROSATOM State Atomic of scarce natural resources and application Energy Corporation and managing company of the latest environmental, low impact, energy and embrace the entire range of RIAR’ activities. and the material-saving technologies depends The major areas of its business concentration on the key performance indicators. Safe operation include nuclear, radiation, industrial 68 Management Efficiency

and environmental safety, operating Such revenue-generating business indicators performance and financial viability, increase of its as “Free adjusted cash flow”, “Integrated index share on the national and global markets. of foreign trade revenue”, “Integrated index of new The key performance indicators are targeted products”, “Revenue from sale of innovative at growing financial and business performance products”, which could bring tangible benefit, were of the enterprise and industry. However there are achieved in the year under report. The amount also non-financial performance indicators of internal funds which could be used for investing (for instance, requirements to the occupational is estimated following the fulfillment safety and health standards are not violated, of the aforesaid indicators. The strategy matrix no events with safety relevance of 2 and higher with key performance indicators of RIAR’s Director according to the INES scale). In 2016 they were is given in Section 3.4 “Key Performance Indicators”. included for the first time in the KPI matrixes The orders RIAR booked provides for a total of all the employees. RIAR adheres employment of 3000 in the city, an adequate level to the principle of equal opportunities and is of pay, social benefits and guarantees, engagement notable for a lack of gender-based of Contractors within the framework of existing discrimination: a rate of fixed salary ratio is one cooperation and thus contributing to better to one for men and women for all categories development of their geographical regions. of staff. The KPI matrixes of top management JSC “SSC RIAR is a major taxpayer and have performance indicators attributable an enterprise with a high level of social to the environmental impact: RIAR”s Director is fully responsibility. Particular attention is traditionally in charge of its environmental performance. given to development of corporate culture, human The top management of the enterprise was resources and to interaction with educational entrusted with responsibility for mitigation institutions (see Section 4.5 “Human Capital”). of adverse environmental effect. These duties were The social pillar of sustainable development shared among the Chief Engineer and Deputy is targeted at preserving stability of existing social Directors. The Chief Ecologist is fully liable and cultural frames and reducing the number for observing environmental laws and regulations. of personal conflicts. The available research From an environmental perspective, sustainable and production capacities, optimization of business development should provide for the integrity processes, efficiency enhancement as well as and viability of biological and natural extension of business range and expertise systems, environmentally sound development contribute to a long-term stable and sustainable without any harm being done to the environment, development of JSC “SSC RIAR” and thus health of the employees and public (see Chapter 4 being a good evidence of high-level social “Management of Capital and Performance”). responsibility.

Public stance as to sustainable development In the reporting year, JSC “SSC RIAR” standards guarantees active engagement continued working out the public stance of all the shareholders and parties concerned, with the focus on corporate social responsibility respect and consideration of their views to establish trust channels through interactions and opinion for analysis and management with shareholders in conformity of the enterprise business. In accordance with the requirements and basic principles with Standard АА1000 APS (The AA1000 of the AA1000-series international AccountAbility Principles Standard) JSC “SSC RIAR” standards (Table 3.12.1). Adherence to these demonstrates a systematic approach JSC “SSC RIAR” Annual Report 2016 69

to managing cooperation with the shareholders and thereby enabled timely response to them. and parties concerned as it is considered to be Standard AA1000 SES (The AA1000 Stakeholder an important factor of management performance Engagement Standard) made it possible to engage enhancement and reporting quality. shareholders to the maximum extent and thus Its adoption led to identification of the most to consider their views and ideas for analysis important challenges for sustainable development of RIAR’s business performance.

Table 3.12.1 Principles set forth in the АА1000 Standards

Principle Specification description

Participation of shareholders in elaboration of crucial strategic decisions with a view Engagement to attain sustainable development (see Chapter 2 “Strategy”)

Evaluation with a view to determine timeliness and significance of the information disclosed Importance to the Company and its shareholders (see Section 2.4. “Relevant Aspects of Activity” and Chapter 5 “Stakeholder Engagement”)

Responsive measures taken by the Company responding to requests of shareholders as to its business Responding activities and effecting sustainable development performance (see Chapter 5 “Stakeholder Engagement”)

The Institute being targeted at ensuring shareholders (Fig. 3.12.1) for each business a high level of openness and transparency direction as well as communication and public in its activities, more predictable and sustainable awareness-rising campaigns (see Section 4.5 public reporting, interacts with its shareholders “Human Capital”). For the purpose of successful purposefully (see Chapter 5 “Stakeholder implementation of transparency policy, all currently Engagement”), provides information on all available form of communication such as the aspects of its business in a timely manner, publication of reports (Annual Report, responds to the demands and wishes speedily, Environmental Compliance Report, Annual implements consistently the principles Scientific Report (report describing the major R&D of corporate information policy (see Annual work accomplished in the year under report Report 2015: http://niiar.ru/sites/default/files/ (http://niiar.ru/annual_report))), internet, websites, pgo2015_links_0.pdf) by maintaining a proper questionnaires, press conferences, public balance between openness and accessibility dialogues, consultations, arrangement of information and its commercial interests. of shareholders’ on-site visits, distribution JSC “SSC RIAR” pursues systematic o promotional brochures etc. are used and results-oriented interaction with its (Fig. 3.12.2). 70 Management Efficiency

Fig. 3.12.1. General meeting with the media

Fig. 3.12.2. Communication activities of JSC “SSC RIAR” JSC “SSC RIAR” Annual Report 2016 71

Development in the region of RIAR’s operation

JSC “SSC RIAR” puts great importance to the RF subject consolidated budget to the development in the region of its operation (Table 3.12.2). because the challenging tasks the Institute has The economic value generated is distributed been faced up with call for substantial between Suppliers and Contractors improvement of the infrastructure in Dimitrovgrad (within operational expenditures), providers and bringing it to conformity with the highest of funds (in the form of interests payments standards known in the world. Relations to creditors), RIAR”s staff members (payroll with the region where RIAR undertakes its business payments of employees and social charges), activities are established through the intensive the RF government (in the form of taxes), work with the local authorities and the general local communities and agencies public, elaboration and financial backing of the regional and municipal authorities of projects with social and humanist response (in the form of investments in communities and with the focus on specific goals and taxes). and given territories. The ROSATOM State Atomic Energy Corporation and the government of Ulyanovsk region entered into the cooperation At the year-end 2016, the total amount agreement. This agreement opens up new of charges payed by the Institute to all level extensive opportunities for additional targeted budgets and non-budgetary funds equaled financial backing of socially important projects 797 million rubles that was 15 % higher than using tax resources of JSC “SSC RIAR” in 2015.

Table 3.12.2 Economic value generation and its distribution among the shareholders on an annual basis EC1

Criterion, mln. RUB 2014 2015 2016

Generated economic value (sales revenue, 4 426.4 4 999.6 5 727.7 investment revenue assets revenue)

Direct economic value generated and distributed: 5 222.6 5 356.2 5 499.9

Operational expenditures 3 069.1 2 983.5 3 058.7

Payroll payments and other employee benefits 1 546.9 1 492.3 1 652.2

Payments to the providers of funds 91.9 287.2 154.8

Gross tax payments 449.0 543.0 578.1

Investing to communities 65.7 50.2 56.1

Dimitrovgrad entered into the I-st category complicated social and economic status. of single-industry municipalities in the Russian In accordance with the Resolution of the Governor Federation (single-industry town) with the most of the Ulyanovsk Region, the Council 72 Management Efficiency

for development of single-industry municipalities practice, production-oriented practice, research in Ulyanovsk Region was set up in order practice and pre-graduation practice. to promote interaction among executive In 2016 JSC “SSC RIAR” joined a large- and legislative bodies of State government scale project “RUSNANO School League” authorities with local self-government bodies with the purpose to support and promote of municipal entities in order to foster elaboration the ideas of modern science education and implementation of special measures to support in the Russian schools. development of single –industry municipal entities. Different workshops, conferences, Two representatives of JSC “SSC RIAR” as it is negotiations, meetings, business meetings were the backbone enterprise in the town became held in 2016 at Slavsky Conference Center the members of this Council. One of them is with the participation of JSC “SSC RIAR”, ROSATOM the Head of the Department for R&D Management State Atomic Energy Corporation, Federal and International Activities and the second is Medical-Biological Agency of Russia, public the Head of the Department for Reginal organizations from the town and region, as well as Government Relations and Social Infrastructure а executive bodies of State government Facilities. authorities and local authorities. Various scientific programs and cultural events initiated Healthy way of life. Healthy lifestyle by the ROSATOM State Atomic Energy Corporation activities are targeted at further development were organized: “Territory of ROSATOM Culture”, of municipal sports infrastructure to increase “Outdoor Museum” etc. Numerous social events the number of public going in for sport and access of city-, region-, industry-specific relevance to sports facilities. Every year the Institute holds including events of all-Russia importance corporate Olympics for its employees but their were organized. Among them were also youth family members can take part in them also. Such leadership forums, professional days etc. a sporting event contributes greatly to promoting Some events were devoted to the sixtieth jubilee health lifestyle. In 2016 more than fifty employees of the Institute. More than 60 thousand people aged between 24 and 76 reached qualifying attended performance, concerts, meet-the-artist standards within the All-Russia sporting festival events, exhibitions and festivals. “Ready for Work and Defense” for labor associations Contribution to improvement of public and more than 80 employees and their family utilities and living environment in the city. members took part in the mass bike ride marathon JSC “SSC RIAR” provides electrical power, supplied devoted to celebration of the Day of Athlete cold and hot water as well as heat to the western and to the sixtieth jubilee of the Institute. district of Dimitrovgrad. Redundant electric energy Contribution to education and culture. is supplied to the unified energy grid of Ulyanovsk In 2016 the Institute made every effort to advance Region. In 2016 году a large scope of work was in networking with educational establishments done to achieve proper functioning of the energy of all types to ensure adequate staffing; setting up infrastructure in the western district the advanced library-based center to enhance of Dimitrovgrad. The territory nearby the Marriage informational support and IT penetration as well Registration Hall was landscaped and redecorated. as intellectual potential of people; development Asphalt surface course was improved of cultural property. JSC “SSC RIAR” collaborates on pavements and motorways. with 27 higher education institutions in the Russian The ongoing housing program Federation in an integrated way in order to educate implemented by the Institute in cooperation and train competent specialists (see Section 4.5 with the Investment and Construction Company “Human Capital”). A lot of students studying “Zapad” made it possible to improve living in Russian universities (primarily the students standards of Dimitrovgrad inhabitants including of Dimitrovgrad Engineering & Technology the RIAR’s employees and to buy apartments University — a branch of Federal State Budgetary in the residential area “AcademGorodok” Educational Institution of Higher Professional at a preferential price. This residential area is Education “National Research University — located in the forestall area and covers an area Moscow power Engineering Institute”) had of 8 ha. It complies with the toughest demands vocational practice of all types at RIAR: trained now placed on the modern districts. The construction project provides for its JSC “SSC RIAR” Annual Report 2016 73

comprehensive development, construction constructed nearby the residential area of social-importance and commercial in the nearest future. In 2016 34 families became facilities, vegetation, children’s playgrounds happy owners of apartments. One hundred fifty six and sportsgrounds, cycling and walking lines. (156) families moved into new apartments in total A new school and kindergarten are going to be since the program had been implemented.

Professional engagement and interaction with suppliers and contractors in the region of the RIAR’s operation

The construction of multi-purpose fast and in Dimitrovgrad. Each job in the construction research reactor MBIR (Fig. 3.12.3) of the aforesaid facilities actually provides and multifunctional radiochemical research opportunities for creating another 10 to 12 jobs complex stimulates the creation of new jobs in the allied industry (metallurgy, machine- (600 and 86 people were employed, respectively). building industry etc.) and thus the total Some workers are hired from the local number is 6 500 to 7 500 people. residents who live in the Ulyanovsk Region

Fig. 3.12.3. At the MBIR-reactor construction site

Nuclear Innovation Cluster in Dimitrovgrad

The Nuclear Innovation Cluster of presence” in Dimitrovgrad. The fundamental in Dimitrovgrad, Ulyanovsk Region was established idea behind the Cluster is to concentrate unique as one of the most effective tools for Dimitrovgrad research infrastructures and expertise of its and Ulyanovsk Region development. The Cluster participating parties at one place. As of the end was developed with the active cooperation of 2016, the Cluster consisted of 52 organizations: and support of Dimitrovgard municipal large state-owned and private companies, administration, the Government of Ulyanovsk educational institutions, small and medium region, ROSATOM State Atomic Energy scale enterprises, governmental authorities Corporation, Federal Medical and Biological Agency (http://cluster-dgrad.ru/rus/uchastniki-klastera). under the RF Ministry of Health and Social There were more than 120 projects Development. Nowadays the main purpose within the Cluster amounting to approximately of the Nuclear Innovation Cluster is to work out 65 bln rubles. and enhance “R&D and innovation territory 74 Management Efficiency

Official website of Independent Non-Profit Organization “Center for Nuclear Innovative Cluster Development”, Dimitrovgrad, Ulyanovsk Region: http://cluster-dgrad.ru/rus/ Internet portal “Map of Russian Clusters”: http://map.cluster.hse.ru/cluster/27 Cluster in social media: https://www.facebook.com/crk.dgrad

The Research Institute of Atomic Reactors small-sized innovative business and its promotion. forms the core of the Cluster. A close cooperation There is another project under development among the participating parties creates favorable in Dimitrovgrad to set up the industrial park investment climate to implement the program through cooperation of the Government on the Nuclear Innovation Cluster Advancement of Ulyanovsk Region, JSC “SSC RIAR” and Nuclear with the focus on three major trends of activity: Innovation Cluster. This project will make implementation of large-scale cluster projects it possible to allocate at least ten high-tech large- (http://cluster-dgrad.ru/rus/proekty-klastera) scale enterprises in the city. The Nuclear innovation with guaranteed federal financing within the scope Cluster is in the list of Pilot Innovation of federal task-oriented programs; establishment Territorial Clusters. It is supported by the Center of social, engineering and transport infrastructure for Nuclear Innovative Cluster Development inside the territory of Cluster projects under the program of the RF Ministry for Economic implementation to create favorable Development targeted at small- and medium-size and comfortable conditions for living and optimal businesses support. climate for business doing as well as for beginning

Major projects of Nuclear Innovative Cluster

1. Construction of the Federal High-Tech Center of Medical radiology (http://cluster-dgrad.ru/rus/proekty-klastera/9-pages-ru/55-federalnyj-vysokotekhnologichnyjtsentr-meditsinskoj-radiologii-fmba-rossii). 2. Set up of research and production complex for radio-pharmaceuticals and medical-purpose products (http://clusters.monocore.ru/file/708/%D0%98%D0%BD%D0%B2% D0%B5%D1%81%D1%82%D0%B8%D1%86%D0%B8%D0%BE%D0%BD%D0%BD%D1%8B%D0%B9%20%D0%BF%D1%80% D0%BE%D0%B5%D0%BA%D1%82%20%D0%9D%D0%9F%D0%9A%20%D0%A0%D0%A4%D0%9F.pdf). 3. Molybdenum-99 sustainable production (http://cluster-dgrad.ru/rus/proektyklastera/9-pages-ru/49-molibden-99). 4. Construction of Multipurpose Fast Research Reactor (рис. 3.12.4) (http://cluster-dgrad.ru/rus/proekty-klastera/9-pages-ru/47-mbir-iyau-mbir). 5. Construction of multifunctional radiochemical research complex (http://cluster-dgrad.ru/rus/proekty-klastera/9-pages-ru/51-polifunktsionalnyj-radiokhimicheskijissledovatelskij-kompleks).

The cooperation among the main of Ulyanovsk and Dimitrovgrad. In 2016 participating parties arose interest to cooperation the management principle of Nuclear Innovation and expanded the geographic scope and thus Cluster was analyzed by the leading experts promoting the formation of research of the European Secretariat for Cluster Analysis and production basis for agglomeration (http://www.cluster-analysis.org/). Its structure, JSC “SSC RIAR” Annual Report 2016 75

financing, management principles, contacts, in Dimitrovgrad, Ulyanovsk Region in cooperation cooperation with relevant players with “National Cluster Association” (Czech and achievements were subjected to thorough Republic) put in place an educational program- analysis. They were analyzed in comparison forum — workshop (discussion platform) with the similar clusters in Europe of the same level for Innovation Territorial Clusters successfully and technical performance in the same technical in the same year. The experts representing field. Bronze Certificate of the European Cluster the participating countries advance their skills Excellence Initiative was awarded based in project management through participation on the results of analysis. Moreover, in the educational program of the German the Independent Non-Profit Organization “Center Academy for Economics and Management for Nuclear Innovative Cluster Development” (Bad Harzburg, Germany).

Fig. 3.12.4. Participants of the International Scientific Workshop Meeting devoted to MBIR-based International Research Center establishment

Foreign Participating Countries of the Nuclear Innovation Cluster

 France Clusters (http://www.franceclusters.fr).  INTER-MEDICO GmbH (http://www.intermedico.de).  NANOPROGRES (http://www.nanoprogres.cz).  National Cluster Association (http://www.nca.cz).  RAMON Science & Technology Co. (http://www.ramon.com.cn).  Slovak Innovation and Energy Agency (http://www.siea.sk). 76 Management of Capital and Performance JSC “SSC RIAR” Annual Report 2016 77

78 Management of Capital and Performance

4.1. Financial Ñapital

The investment projects implemented by The financial recovery program aims at increase RIAR (refurbishment of production facilities in revenue including but not limited to indexation intended for production of cobalt-60 sources of prices for the BN-800 fuel assemblies of medical application, californium-252 and the cost of irradiation tests in the research radionuclide as well as other isotopes reactors; conservative management of costs; of transplutonium elements, iodine-131 working capital optimization at the expense radiochemical) made it possible to increase of inventory level reduction; and headcount production of isotopes by 64% in 2016 optimization. All the measures specified and compensate for shortfall in revenue resulted in the action plan under the financial recovery from a decline in revenues under the federal program for 2016 were implemented in full. They task-targeted programs. Due to the gaining leave ambitious prospects for proceeding of profit with taxes allowed for in accordance with these activities during the current year with the results of 2016, there are plans with the focus on the break-even operation. to transfer the tax on profits into the federal The measures targeted at conservative budget in 2017 for the first time over a long management of costs were implemented period. on a large scale beginning with the work The year under report was known for such with the suppliers to obtain cutting of prices an important event as the approval of financial and ending with PSR-projects. The costs recovery program for the term 2016–2018 were reduced by 603 mln rubles relative by the responsible officials of the ROSATOM State to the budget. Atomic Energy Corporation: K.B. Komarov, In 2017 the Institute intends to pursue the First Deputy Director General, Block further automation of financial and economic for Management and International Business processes (medium-term planning, Activities and V.A. Pershukov, Deputy director budgeting) as a part of work on reduction General, Block for Innovation Management. of process term.

JSC “SSC RIAR” Annual Report 2016 79

Financial capital management

Financial stability of JSC “SSC RIAR” from the target values which are necessary greatly depends on the efficient management for the top management of RIAR and line of its economic performance. The budget managers of its departments to make management system is the backbone of economic decisions. Financial management efficiency performance management. The budget is achieved owing to the financial policy management system is governed by the standards of JSC “SSC RIAR”, implementations of industry- of integrated management system and is based specific and internal regulations and standards on economic data acquisition, classification, attributable to the financial risk management. processing, and analysis in reference Thus it is possible to establish the bank- to construction projects, income items company relationships enabling optimizing and expenses of RIAR’s departments. the bank account structure and minimizing The budgeting system assigns the target values costs for bank servicing, operational planning of economic performance with due optimizing cash flows in order to allocate funds consideration for strategic objectives by means inside RIAR and invest free cash in an efficient of a regular plan-fact analysis. It provides manner and managing financial risks. the timely and immediate data on deviations

Financial and economic performance

Positive dynamics of the JSC “SSC RIAR” mentioning optimization of the performance performance in 2016 (Tables 4.1.1 and 4.1.2) is schedule for ordinary periodic repair a result of measures undertaken by the Institute and overhaul maintenance, restraining of rising to enhance its business performance prices for raw materials and products to be in conformity with the approved plan of actions procured, savings from competitive bidding, under the financial recovery program work without subcontracting, and optimization of JSC “SSC RIAR” for the term of 2016–2018. of non-core assets. Working capital optimization Owing to these actions, the Institute could at the expense of inventory level reduction was increase a revenue (+988 mln rubles compared also undertaken in 2016 as a part of measures to 2015) and reduced losses attributable targeted at enhancement of operational to the ongoing activities (by 612 mln rubles efficiency. Inventory decumulation amounted compared to 2015 and by 733 mln rubles as to 973 mln rubles compared to 2015. compared to the expected level for 2016 The targets for 2017 are indicative (90 mln rubles)). Financial backing amounted of positive dynamics despite an insignificant to 2.6 bln rubles that was provided shortfall in revenue because of completion by the ROSATOM State Atomic Energy of the BN-800 fuel assembly fabrication but Corporation as well as measures targeted there are plans for compensating such at optimization of costs in the amount equal a shortfall at the expense of increased earnings to 0.6 bln rubles made it possible to reduce from R&D contracts and radioisotopes. the Institute’s debt burden by 3.5 bln rubles The financial recovery program shall be including the borrowed assets and debts continued with the focus on escalating to the suppliers. As a result, saving amounting the prices for products and services rendered, to 205 mln rubles could be achieved headcount optimization and cost cutting. at the expense of interest payable on loans If the targets are achieved, the Institute can and borrowings. Among the measures directed close 2017 with a net profit amounting towards the cost reduction, it is worth to 65 mln rubles (Fig. 4.1.1 and 4.1.2), 80 Management of Capital and Performance

Table 4.1.1 Key performance indicators of JSC “SSC RIAR”

Indicator values on an annual basis

Performance indicator 2016 2015 Target Actual

Adjusted free cash flow, billion rubles –0.177 0.226 0.353

Labor efficiency, mln rubles / person per year 1.12 1.49 1.51

Total cost, billion rubles – 3.173 3.176

Integrated index, % – 100 137.3 Revenue from new products

Foreign trade revenue – 100 164

Revenue from sale of innovative products, bln rubles – 3.55 3.602

Personnel staffing plan, % Unaccomplished 100 100

LTIFR and nonoccurrence of incidence of falling from elevations, 0 0.1 0 including Contractors, %

No events with safety relevance of 2 and higher and accidents at Accomplished 0 Accomplished hazardous production facilities according to the INES scale

Fulfillment of government orders, including state defense contracts Accomplished 100 Accomplished and contracts, %

Table 4.1.2 Key economic indicators of JSC “SSC RIAR”

Indicator values on an annual basis Economic indicator 2013 2014 2015 2016 2017

Revenue from sales of goods, products, work, services, mln rubles 5 882.9 3 700.9 4 119.1 5 107.4 5 047.6

Cost of sold goods, products, work, services, mln rubles 5 617.7 3 862.2 4 185.4 4 055.6 3 977.9

Gross profit (loss), mln rubles 265.2 –161.3 –66.3 1 051.8 1 069.7

Management expenses, mln rubles 710.4 743.1 805.6 807.5 867.5

Share of management expenses in the revenue, % 12.1 20.1 19.6 15.8 17.2

Profit (loss) from sales, mln rubles –502.7 –972.2 –884.6 110.7 3.2

EBITDA, mln rubles –48.8 –877.2 –448.3 241.1 429.9

NOPAT, mln rubles –175.7 –825.9 –335.6 2.3 224.7

Net profit (loss), mln rubles –190.1 –1 063.4 –702.1 –90.3 64.8 JSC “SSC RIAR” Annual Report 2016 81

Fig. 4.1.1. Dynamics of RIAR’s revenue from services rendered for the term of 2013–2017 showing deviations of 2016 indicators from 2015 indicators, mln rubles

The growth in revenue was the gain and to radioisotope production amounting of production volumes of radioisotopes to 1 337 mln rubles ($ 14.5 mln). The R&D including molybdenum-99 and californium-252 scope depends on funding under federal as well as fabrication of the BN-800 fuel target-oriented programs “Nuclear Power assemblies. Additional revenue was a result Technologies of the New Generation of research and development work including for the Period of 2010–2015 and till 2020” and R&D done within the framework of industry- “Nuclear and Radiation Safety for 2008 and for specific project “PRORYV” (Fig. 4.1.3, a). the Period till 2015”. Most of the funds intended The undertaken remedial measures targeted for R&D were allocated in 2013. at “Revenue” index improvement made it possible The share of the funds from the federal budget to increase the share of exports from 7 up to 43 %, decreased from 62% down to 13% in total including the revenue attributable to contractual but the enterprise managed to compensate work amounting to 496 mln rubles ($ 6.7 mln) such a shortfall. Between 2013 and 2016 the 82 Management of Capital and Performance

R&D scope under the contracts increased rubles. (+496 mln rubles). The share of foreign by 474 mln rubles (+37 %) including 7 times contracts increased from 6 up to 33 % within increased scope of R&D done under the contracts the total amount of contracts (Fig. 4.1.3, b). with foreign customers that amounted to 578 mln

Fig. 4.1.2. Growth factors of RIAR’s revenue from services rendered in 2016 vs. 2015, mln rubles

Fig. 4.1.3. Revenue mix attributable to R&D with due consideration for work done under the federal target-oriented programs (a) and without them (b), revenue from sales of isotope products (c) on an annual scale basis JSC “SSC RIAR” Annual Report 2016 83

In 2017 RIAR is planning to increase up to 2097 mln rubles (+15 % to the level attained the revenue from R&D done under the contracts in 2016). up to 2223 mln rubles (+ 27 % to the level attained The geographic segment of sold in 2016). Between 2013 and 2016 the scope products shows a steady growth in demand of isotope production and sales (Fig. 4.1.3, c) of foreign customers (Table 4.1.3). A share of work increased three times amounting to 408 mln rubles performed by the subcontractors made up 3 % and especially owing to production in the total volume of revenue for 2016. of molybdenum-99 of medical application. In 2017 The major amount of costs attributable RIAR is planning to increase its revenue to subcontractors (Fig. 4.1.4) was the electricity from production and sales of radioisotopes transmission services (80 %).

Figure 4.1.4. schematic representation of revenue in 2016 and the share of principal contractors

Table 4.1.3 Revenue distribution relevant to geographic segments and business activities, mln rubles

Indicator values on an annual basis scale Economic indicator 2013 2014 2015 2016 2017 Revenues (sold products, work, services) 5 883 3 701 4 119 5 107 5 048 Including internal group turnovers 2 514 1 180 1 239 2 015 1 072 By geographic segments:

Russian Federation 5 466 3 014 2 465 2 882 2 449 CIS 20 22 34 38 34 Foreign countries 397 665 1 620 2 187 2 565 Relative to business activities:

Fabrication of the BN-800 fuel assemblies 1 207 0 264 619 0 R&D 3 381 2 429 2 061 2 010 2 244 Production of radioisotopes 479 666 1 110 1 816 2 097 Electricity transmission services 620 460 428 476 624 Others 196 146 256 186 83

84 Management of Capital and Performance

As evidenced by the analysis of Institute’s funds decreases and equity capital increases, financial and business performance (Table 4.1.4), the Institute has improved the situation its financial standing improved significantly with external borrowings and enhanced its as a result of gain in highly liquid assets financial viability (the tasks the Institute is faced in the balance of foreign currencies (cash with are fulfilled at its own cost and expense). assets) and of reduction in short-term The increase in turnover of the current assets liabilities (borrowings and payables to suppliers occurs because the growth in revenue is ahead and contractors). As the share of borrowed of current assets.

Table 4.1.4 Business solvency, liquidity and financial stability of JSC “SSC RIAR”

Indicator value on an annual basis scale Indicator Recommended value 2014 2015 2016

Financial stability indices Leverage ration (capitalization rate) 48 49 13 Lower than 1002 Ratio of borrowed and own funds 53 49 31 Equity ratio 67 67 88 40–80 Equity plus long-term debt to total assets ratio 74 73 91 60–90 Long-term debt ratio 9 7 3 – Current liquidity and solvency ratios Absolute liquidity ratio 26 18 143 20–50 Quick liquidity ratio 41 36 165 70–80 Current liquidity ratio 117 86 250 100–200 Solvency ratio 307 305 849 200–250 Current assets turnover ratio 49 57 75 –

Net assets

The dynamics of aggregate net assets shows Table 4.1.5 a steady growth trend at JSC “SSC RIAR”: Net assets dynamics the increase of 37 % compared to the 2015 level and 68 % compared to the 2014 level (Table 4.1.5). Indicator value on an annual The excess of net assets over the charter capital basis scale, thousand rubles in 2016 is in conformity with the RF legislation Indicator in respect to their ratio and is a good evidence 2014 2015 2016 of RIAR’s business performance enhancement. Charter capital 9 751 206 12 685 792 12 685 792

Net assets 9 180 254 11 262 257 15 396 049 JSC “SSC RIAR” Annual Report 2016 85

4.2. Intellectual Capital

Intellectual capital management

Intellectual capital is of key importance engineering). There are seventy eight for JSC “SSC RIAR” to enhance its innovative professionals with academic degrees at RIAR, activities and achieve its strategic objectives. including eleven professionals with a Sc.D. Intellectual capital of JSC “SSC RIAR” is its degree. Highly-qualified staff keeps RIAR’s intangible assets, e.g.: knowledge, information science and technology capabilities technologies, intellectual property, and people and carries out research at a high level. with their competencies 1806 (53.9 %) out This fact is confirmed by publications of 3398 RIAR’s employees have higher of RIAR professionals and their participation education, including 443 (24.5 %) employees in the conferences, symposia, and workshops who have higher education in nuclear (Table 4.2.1). Table 4.2.1 Publications of RIAR’s professionals and their involvement in different events

Indicator Value Total publications in peer-reviewed scientific periodicals 54 Published articles in scientific journals: 37 International 9 Russian 28 Participation in the conferences, symposia, workshops, etc.: 91 Russian 73 International 18 Including those held in CIS 2 Reports (presentations) at the conferences, symposia, workshops, etc.: 120 Russian 99

International 21 Including those held in CIS 2

Knowledge management system

The process of knowledge generation, Report 2013 (Section 4.3. “Knowledge keeping, transfer and use is one Management System Development”, of the cornerstones of innovation management Chapter 4 “Sustainable Development Results”: and enterprise growth. Like any other business http://niiar.ru/sites/default/files/report_2013.pdf). process, it should be manageable, plannable In the reporting year the knowledge and regulated process. It is highly important management system was enhanced for JSC “SSC RIAR” to keep the scientific with the focus on three key trends as it was and technical competencies needed for safe before (see Annual Report 2014, Section 2.10 operation of the existing nuclear reactors “Knowledge Management” of Chapter 2 and effective implementation of new “Corporate Governance”: http://niiar.ru/sites/ developments. In 2012 RIAR launched a project default/files/pgo2014_ln_29062015_c_ssylkami_ on the knowledge management system. 0.pdf). Its milestones are provided in detail in Annual

86 Management of Capital and Performance

Critical knowledge keeping

Critical knowledge covers both provide a positive environment the knowledge that becomes a priority in JSC for interaction with experienced highly “SSC RIAR” under limited resources skilled professionals, dissemination and the knowledge that is particularly important of knowledge among recent graduates to ensure successful ongoing operation and PHD-students (the lecture materials are of the Institute including its innovation made available on the intranet site). activities. The objectives and tools of keeping critical knowledge are provided in Annual Report 2014 (Section 2.10 “Knowledge Twenty one survey course lectures have Management” of Chapter 2 “Corporate been given with the focus on the major trends Governance”: http://niiar.ru/sites/default/files/ of the RIAR’s business activities. pgo2014_ln_29062015_c_ssylkami_0.pdf).

In the reporting year JSC “SSC RIAR” accomplished the following activities under In order to ensure continuity in research the project on keeping critical knowledge: and development at JSC “SSC RIAR”,  The plan and schedule of critical knowledge the Institute annually arranges contests, forums, keeping for 2017 including updated map conferences and technical tours for students, and list of critical knowledge, knowledge-loss post-graduates and young researchers (see risk assessment and programs on critical Section 4.5 “Human Capital” and this Section knowledge keeping was worked out too). and approved; Plans for 2017:  Media modules were developed and placed  To update the knowledge map and list on information portals of RIAR Scientific of critical knowledge on an annual basis; Library and ROSATOM for each of the following  To compile a list of RIAR employees areas: “Radioactive waste management who have critical knowledge (including including pyro-electrochemical and gas the cumulative risk factor); fluoride reprocessing methods for spent  To hold lectures and workshops nuclear fuel reprocessing”, “Radiation under the project on keeping material science of zirconium alloys”, critical knowledge; “Nuclear physics and engineering  To prepare media modules and make them of irradiation tests. Irradiation test methods”, available on R&D information portals “Analytical support and quality control of RIAR and ROSATOM with reference of granulated MOX-fuel fabrication for fast to the following topics: Fast reactor fuel”, reactors”, “Science behind strontium-89 “Production of radionuclides in research production”; reactors”, “Absorber materials and control  Survey course lectures are held on a regular rods for nuclear reactors”, “Destructive post- basis with the focus on major trends irradiation examinations: selection, test of the Institute’s business activities to assist methods, equipment”, “Spectrometric in interaction of recent graduates and dose measurements of neutrons and experienced highly skilled professionals, in research reactors”.

Intangible assets management

In 2016 the ROSATOM State Atomic Energy products and services”. The aforesaid program Corporation worked out and approved calls for developing and putting in place new the Program on innovative development effective intellectual property management and technical modernization until 2030 that is system by JSC “SSC RIAR” as it is one targeted at achieving strategic objective “Global of the backbone Research Institutes leadership on the worldwide market of hi-tech in the nuclear industry. Such a system will make it JSC “SSC RIAR” Annual Report 2016 87

possible to transform technological innovations registration of ownership under the project into the main factor of economic growth for the MBIR reactor construction; and social development both for the Institute  An application for an invention was prepared and nuclear industry in entirety. Such a system and submitted for State registration should enable identifying the intellectual property of ownership under the project for the BOR-60 effectively, reviewing and analysis, finding reactor upgrade. and implementing the optimum protection, and its Overall eighteen documents protecting items entering on the balance sheet as intangible assets. of intellectual property (patents for inventions The intellectual property management and utility models), certificates of state registration at the Institute is governed by the requirements of ownership for computer software related of prevailing laws, regulatory and guidance inventions were obtained in 2016 (Fig. 4.2.1 documents of ROSATOM State Atomic Energy and 4.2.2, Table 4.2.2). Corporation and local regulatory instruments. In 2016 infringement search of technologies under development with the focus on the major trends of the Institute’s business activities was carried out with the following outcomes:  Twelve intellectual products (three inventions and nine computer software related inventions) were prepared and submitted for State registration of ownership under the project for polyfunctional radiochemical research complex construction;  Three applications for an invention in the form of intellectual product and three applications Fig. 4.2.1. Book value of the RIAR’s intangible for computer software related inventions assets, thousand rubles were prepared and submitted for State

Fig. 4.2.2. Portfolio of the RIAR’s intellectual property (as of 31 December 2016) 88 Management of Capital and Performance

Table 4.2.2 Inventive work at JSC “SSC RIAR”

Indicator values on an annual basis Indicator 2014 2015 2016 Applications for an invention and utility model 8 14 9 Granted patents for an invention and utility model 19 8 16 Know-how legal protection 23 17 0 Supported inventions and utility models; know-how 181 198 214 Applied inventions and utility models 38 42 48

Scientific and technical information support

JSC “SSC RIAR” organizes its work on R&D records and making the collection of digital data scientific and technical information support to be placed on the ROSATOM unified industry- addressing the following fronts: identification specific portal of scientific and technical of information needed, generation of scientific information. The scope of the following collections and technical information content, distribution was expended during the year under report: of information among users and potential users, “Consolidated catalogue of scientific and technical access to different sources of information, study libraries”, “Catalogue of digitized archive and adoption of best practices for the content documents”, “Industry-specific publications”, management. Users are informed about new “Publications”, and “Proceedings”. The Institute editions, revisions and information products provides subscription for more than 60 series on a common and individual basis. In 2016 the test of scientific and technical periodicals access was provided to information management and publications. RIAR made a contract system “TechExpert” based on professional with the State Public Scientific and Technical documentation system “Kodex”. One of the topical Library to get an access to the national library and practically important courses of activity is stocks through the inter-library exchange system. maintenance of bibliographic database comprising Major efforts are undertaken to give a chance publications of the RIAR’s employees. The second for the RIAR’s employees to attend different one is the access to digital Russian scientific events, increase a number of their and international libraries. In order to keep scientific publications in the flagship Russian and foreign heritage, the scientific and technical library is journals. involved in digitization of proprietary archive

Staff training and development

People and their competencies are RIAR” assisted in establishing an industry- the most important component of the knowledge oriented department “Irradiation Technologies” management system. In accordance at the faculty of High Technology physics with the Work Program of the Scientific-Education- and Engineering in Ulyanovsk State University. Innovation Consortium engaging higher In 2016 eight post-graduates employed by RIAR education institutions and scientific undertook post-graduate courses at this

establishments in Ulyanovsk region, JSC “SSC Department to be trained in “Condensed Matter JSC “SSC RIAR” Annual Report 2016 89

Physics” and “Material Science (Nuclear power making report in English, reading scientific articles Engineering)”. Four RIAR’s Doctors of Science in English. In 2016 the English courses were combine their work at RIAR with their position attended by 45 staff members. Training was given of lecturer at this department. In 2016 twenty in three levels such as basic, advanced four post-degree students hired by RIAR attended and the course for management. The English educational courses in the following faculties: teachers were interpreters of JSC “SSC RIAR”. Nuclear Reactors and Materials, Radiation The trainees were selected following the results Chemistry, General and Medical Physics, Reactor of their placement tests. They lasted nine months. Material Science, and Radiation Safety at DETI At the end they took an exam to the Commission NRNU MEPhI. RIAR in collaboration with this headed by the Director. The employees who University established the Department completed the English course successfully will have of Nuclear Reactors and Materials. Nineteen a chance to attend international scientific events RIAR’s experts are part-time lecturers at DETI and have priority in their further promotion NRNU MEPhI including five Doctors of Science (Fig. 4.2.3). and five Masters of Science (for details about cooperation in staff training see Section 4.5 on Human Capital). English language courses. In 2016 JSC “SSC RIAR” provided annual English courses for its employees. The main purpose is to develop competencies of researches and engineers and give them a chance to perform their duties successfully as well as to promote international and scientific collaboration. One of the major expectations is their attendance of international scientific events which are held in English, including Fig. 4.2.3. English course trainees but not limited to writing presentations in English,

Mentorship

From the very first days of RIAR 2. Mentorship for recent graduates. The key establishment there has been a mentorship objective of on-the-job training for recent system functioning, and this system is still graduates is their occupational relevant. Highly-qualified experts are appointed and psychosocial adaptation, learning mentors (Fig. 4.2.4). In RIAR the mentorship is theoretical aspects and acquiring practical skills given in the following trends: needed to fulfill their job duties. In compliance 1. Mentorship for students and trainees. with the RIAR’s Collective Labor Agreement, The Human Resources Department of RIAR signs Section Work with the Youth, the employer shall contracts to collaborate with industry-oriented provide social and occupational adaptation for and regional higher educational institutions, its young employees. For example, for recent secondary vocational educational establishments, graduates who are hired for the first time and schools of Dimitrovgrad, Ulyanovsk region. a mentor is appointed for up to six months, RIAR conducts hands-on training which is and for young professionals with the major focused on involving students in the federal in industry-oriented specialties a mentor is target programs, individual approach to every appointed for up to one year. trainee, and close collaboration between RIAR and training departments (Fig. 4.2.5). 90 Management of Capital and Performance

Fig. 4.2.4. Number of mentors at JSC “SSC RIAR”

Fig. 4.2.5. Number of students who did practical training at JSC “SSC RIAR”

3. Mentorship for the transfer of key graduate courses in five industry-scpecific knowledge and skills. Such mentorship includes specialties in higher educational institutions. scientific management of the post-graduates Seven highly-qualified scientific executives were making it possible to keep and transfer the key appointed for these employees at RIAR. knowledge and skills. In 2016 thirty-three To create conditions attractive for recent recent graduated hired by RIAR attended post- graduates including advanced training JSC “SSC RIAR” Annual Report 2016 91

and mastering skills, transfer of knowledge and engineering unit under this Board is and experience by leading professionals RIAR targeted at providing assistance to the young has an established and successfully functioning employees in mastering their job, and acquiring Board of Young Professionals that represents hands-on experience that contribute to fast the interests of young employees. The scientific technical and business career growth.

Knowledge exchange

The major components of the knowledge  Brochure “RIAR is the Largest Site for Nuclear management system are both publications Research”; and books devoted to the key areas of research  Collected book “Nuclear Research Installations performed at RIAR. The authors of books are of CIS Member Countries”. the employees. RIAR is eager to make all publications official. So, the publications are One can find more information assigned with ISBN and UDK codes. Materials about the publications edited and released are subject to editorial preparatory work by RIAR in the relevant sections of Scientific Annual that guarantees high quality of the materials Reports (Report on key research to be published and their full compliance programs performed in the reporting year), with the editorial and publishing standards. In 2016 which are available on the RIAR’s website JSC “SSC RIAR” edited and released the following (http://niiar.ru/annual_report). publications: As the Institute attends different international and regional exhibitions, it is another  Collection of scientific articles and papers obvious and informative way to tell the public written by RIAR scientists and researchers about the business activities of the enterprise, on the relevant topics; promising projects and reactor safety. In 2016  Scientific Annual Report of JSC “SSC RIAR” the enterprise and its business activities were (Report on key research programs performed represented at four international exhibitions: “High in the reporting year) — it is intended Technologies for Sustainable Development for professionals of scientific and research (NDExpo)», “AtomExpo–Belarus”, “AtomExpo” organizations, design bureaus, nuclear and “Health Care”. There was a special exhibit power enterprises, university professors, about RIAR at the inter-industry specialized students of relevant specialties, and senior exhibition that took place in Tula in September schoolchildren; 2016 and was attended by the RF President  JSC “SSC RIAR” Annual Report — it is Vladimir Putin. As usual, JSC “SSC RIAR” appeared an integrated report addressed to a wide as a partner of different regional-level events. audience. It describes the major financial, For instance, RIAR’s exhibit was displayed economic and production activities, at the V-th Regional Youth Innovation Forum. environmental performance in the reporting In 2016 the Institute continued its fruitful year as well as sustainable development; collaboration with the Nuclear Information Center  English version of JSC “SSC RIAR” Annual in Ulyanovsk. Such a collaboration resulted Report that is adopted version of JSC “SSC in the joint engagement in the industry-oriented RIAR” Annual Report intended for foreigners; project “Teachers and health professionals attend  Collection of abstracts, All-Russian Youth nuclear power facilities” (it gave a chance Conference “Research and Development for 407 people to visit RIAR) and in the federal in Support of Next-Generation Nuclear project “RUSNANO School League” (RIAR prepared Technologies Development”; a set of tasks for gifted children, gave lectures  Commemorative publication “RIAR is Sixty: and arranged technical visits to the site), Festival People, Years, Achievements”; of Science, the II-nd International Medical Students 92 Management of Capital and Performance

Tournament, “FANK” science film festival Table 4.2.3 (assistance in organizational arrangements Number of visitors to JSC “SSC RIAR” in Dimitrovgrad, training of experts, and informational support), and “ScienceSlam” Year, value project. Visitors Promo and exhibition activities as well 2014 2015 2016 as museum are considered by JSC “SSC RIAR” as School children 253 245 317 an essential part of educational work. In 2016 more than 1700 people (Table 4.2.3) could see RIAR’s Students 357 301 558 expositions devoted to its history and relevant Others 553 992 842 activities. In its five years of existence, a number of visitors to the museum increased two times. Total 1224 1538 1717 In addition, technical and press tours are arranged including visits to laboratories and production facilities. A special press tour Table 4.2.4 was organized for representatives of regional, Number of visitors to on-site Science Museum federal and industry-oriented mass media at JSC “SSC RIAR” as well as for bloggers devoted th to the 60 anniversary of RIAR establishment Number to promote image-making and communication Year activities targeted at public awareness Visits Visitors and trustiness regarding nuclear industry. 2014 75 378 The tour program also included technical visits to research reactors, visit to the on-site Science 2015 81 405 Museum and participation in press-conference 2016 75 721 with the RIAR’s Director. The jubilee exhibition Total 231 1504 “RIAR is sixty” that took place at Slavsky Conference Center was attended by 1 800 people.

Innovation Activities MBIR construction

The project on the MBIR reactor the pouring of concrete were accomplished construction is implemented under the federal at an elevation level+0.900 m. A large scope target program “Nuclear Power Technologies of R&D work was accomplished under the MBIR of the New Generation for the Period of 2010– construction project. The State Contract 2015 and till 2020”. The MBIR project (Fig. 4.2.6 for the MBIR design justification was fulfilled. and 4.2.7) resides on proven and reliable At the end of 2016 drainage tanks technologies of the BOR-60 reactor. In the year for sodium coolant were delivered to the RIAR under report 43294 m3 of concrete were poured site. and 7 563 t of reinforcing bars were mounted In the mid- and long-term perspective under the MBIR construction. In January 2016 major construction work will be continued, the reactor building walls were mounted and equipment will be fabricated, delivered, at an elevation level –10.800 m but in December installed, started up and adjusted (Fig. 4.2.8). JSC “SSC RIAR” Annual Report 2016 93

Fig. 4.2.6. The MBIR purpose and employment 94 Management of Capital and Performance

а

b

Fig. 4.2.7. Overall view of the MBIR area at the beginning of (a) and by the end (b) of 2016

Fig. 4.2.8. MBIR construction roadmap

JSC “SSC RIAR” Annual Report 2016 95

Plans for 2017:  Reactor building construction  Positive final expertise and affirmative State up to an elevation level of + 34.800 m; expert review of updated design documents  Commissioning of the drainage pumping by Federal Autonomous Establishment station and physical protection system. RF Glavgosexpertiza”;

Establishment of polyfunctional radiochemical research complex

The research and development work assessed. Two applications for inventions have in support of polyfunctional radiochemical research been prepared. A concept of analytical methods complex design was continued in the year have been worked out and prepared under report: design engineering of equipment, for metrological certification: “Plutonium dioxide. elaboration of analytical control methods, Mixed oxide uranium-plutonium fuel. Quantitative manufacturing of prototype and pilot transfer into solution through melting with sodium equipment, testing of radioactive waste bisulfate”, “Transition elements and platinum- management processes. The unified process group metals. Quantitative analysis of transition module was manufactured and completed elements and platinum metals impurities with relevant support systems. To be more exact, in the dissolved samples of irradiated nuclear fuel cooling and inert atmosphere reproduction system with the use of chemical and atomic emission was developed, docking fitting for prototype inter- spectral analysis”, “Mixed oxide uranium-plutonium module container was accomplished, fuel. Measurement of uranium and plutonium mass and a prototype inter-module travelling platform fractions with the use of coulometric titration”, was manufactured. In 2016 the design engineering “Rare-earth elements. Quantitative analysis of intra-module computer-based service system of RRE mass fractions in the dissolved molten salt was continued: its prototype was manufactured, chloride- based samples with the use of atomic unified operator’s work station was developed emission spectral analysis”, “Irradiated nitride fuel. for module control system. The local control system Tritium analysis method”. Decontamination became available for the module also. methods were tested with the use of solutions The integrated software for the control system is and film-forming coatings. Given were also still under development for the polyfunctional recommendations for their application. radiochemical research complex. Evaporation Decontamination waste management methods equipment was developed and manufactured were developed. Application for their patenting has for medium level waste. High-level waste been prepared. As to films resulted vitrification plant is also available. A special research from decontamination, their handling methods project was initiated within the radioactive waste have been developed. Hydrated solution-based management framework. Its major idea is to use cement was formed after their dissolution. lower level radioactive waste as matrices Low–level radioactive waste management to incorporate higher level radioactive waste. methods were developed with reference The outcome of the first stage is the samples to different compositions. Demonstrated of melted murataite ceramics obtained was also their purification allowing their from the dry residue resulted from evaporation drainage into the sewerage. Candidate materials of simulated decontamination solutions were studied for absorption of trace amounts that incorporated iron salts which were of oxygen and moisture vapor from the inert formed after coagulation of low-level waste. A set atmosphere. of test methods are ready for application Technical requirements and technical at the radiochemical research complex. Their specifications are ready for all the equipment technical readiness was implementation was required for radiochemical research complex: 96 Management of Capital and Performance

tilt mechanism for spent fuel assemblies,  Robotized arm of the intra-modular computer- sealing equipment for radioactive waste canisters, based service system can be a ready-made weld joint leak tightness tester, decontamination independent equipment; bath, vented storage place for canisters.  Sorption hysteresis method has been When the storage place for canisters was elaborated and it enables for more accurate developed, one of the design-basis accidents such planning of sorbent agent life cycle; as loss of power in the storage chamber  It seems possible to obtain ceramics similar to of high-level solid radioactive waste had been melted murataite ceramics based on structural proved to be impossible because the storage place materials waste at the stage of liquid zinc could passive cooling of canisters by convection. removal with the use of combined methods of pilot spent nuclear fuel processing methods. New outcomes:

Technical retrofitting of the BOR-60

Fast sodium-cooled fast reactor BOR-60 power engineering” and the federal target is a unique multipurpose reactor. It is widely program “Nuclear Power Technologies employed for irradiation testing of structural of the New Generation for the Period of 2010– materials, fuel, absorbing materials which are 2015 and till 2020”. Technical retrofitting in use including candidate absorbing materials of the BOR-60 reactor is planned under the same for different nuclear reactors including fusion- federal target program in order to extend type reactors. Some primary- and secondary BOR-60 operating lifetime. Planned retrofit will circuit equipment intended for fast reactors enhance reactor safety and extend its is also subjected for irradiation testing experimental capabilities to provide testing in the BOR-60 reactor. The reactor materials in support of the main parameters of Gen IV under irradiation cover almost the entire range reactors, their nuclear safety and fuel cycle. of existing reactors as well as reactors For this purpose the following work was done under development moving from fast reactors in 2016: (BN-800, BN-1200, BREST, SVBR, MBIR)  Technical design document for re- to thermal ones (VVER-TOI, VVER-1500, GT-MHR, enforcement of the buffer tank footing; VGTR) including fusion-type reactor among  Technical design document for electrical the others (ITER) as well as special-purpose parameters control of converting units reactors. The BOR-60 has been in operation in circulating sodium pumps with the data for over forty years and it needs technical output to the data acquisition retrofitting. For this purpose an investment and measurement system; in the amount of 555.9 mln rubles has been  Strength analysis of the III circuit pumping; allocated under the program “Design  Post-irradiation examinations of structural engineering of new test facilities and special materials from the dismantled section equipment, modernization and development of the reverse steam of test facilities to demonstrate feasibility  generator to justify its service life extension; of physical approaches, design concepts,  Instrumentation of the reactor control perform safety analysis and safety assessment and protection system is replaced with a view for safe adoption of scientific with ASUZ-22P instrumentation. and engineering ideas of innovative nuclear JSC “SSC RIAR” Annual Report 2016 97

4.3. Output

The key management objective of our Technologies Division were operated under Institute in 2016 was to develop and implement the designed parameters with no abnormalities a financial rehabilitation program. It might be occurred. The program to ensure safe said with satisfaction that the primary targets and reliable operation of the experimental of this program were achieved. The budgeted base was fully implemented covering technical scope was fully met for R&D, manufacture re-equipping of the BOR-60 reactor and sales of radionuclide products and radioactive and development of cutting-edge digital sources for medical and industrial applications. equipment for the RBT-10/2 control For the first time in many years, 85 % R&D was and protection system. It is encouraging to see completed by RIAR’s own efforts to show an approved concept of the SM reactor core the feasibility of engineering and design upgrading project after many efforts have been solutions for the Polyfunctional Radiochemical made by ROSATOM’s Innovation Management, Complex. The work is carried out under and now the project is ready for investments. the government contract within the scope The preparatory work is scheduled for the next of the Federal Target Program titled “Nuclear Power two years, and the SM modernization itself will Technologies of the New Generation for the Period be done from April 2019 through February 2020. of 2010–2015 and till 2020”. This project will enable improving greatly The nuclear research reactors, experimental the reactor experimental capabilities installations and equipment of the Reactor and extending its operational lifetime at least Materials Testing Complex and Radiochemical until 2030. 98 Management of Capital and Performance

Nuclear Reactor Physics and Engineering, Irradiation Technologies and Reactor Safety

The Research Reactors Complex of JSC ones. There are five research reactors under “SSC RIAR” renders a wide range of services operation (Fig. 4.3.1, Table 4.3.1). to outside companies including international

Fig. 4.3.1. Key applications of RIAR’s research reactors in 2016 JSC “SSC RIAR” Annual Report 2016 99

Table 4.3.1 Key reactor performance in 2016

Parameter SM RBT-6 MIR RBT-10/2 BOR-60

Max power, MW 90 6 41.5 10 50 Utilization factor, relative units: scheduled 0.65 0.68 0.66 0.58 0.64 actual 0.69 0.68 0.66 0.58 0.61 Reactor operation time, days: scheduled 239 250 243 211 234 actual 251 250 243 211 224 Shutdowns 26 38 21 43 8 Unscheduled shutdowns 1 – – – –

VK-50 reactor output

In 2016 the VK-50 reactor celebrated the 51st anniversary since its commissioning (Figures 4.3.2, 4.3.3 and Table 4.3.2).

Fig. 4.3.2. Key applications of VK-50 in 2016 100 Management of Capital and Performance

Fig. 4.3.3. VK-50 output in 2016

Table 4.3.2 Key performance of VK-50 in 2016

Parameter Value

Max thermal power, MW Up to 200 Electric power, MW Up to 48 Operating pressure, MPa 5.5 Number of fresh FAs inserted at the beginning of a reactor run, pcs. 15 Core power density, kW/l Up to 40 Average linear thermal flux density, MW/m2 0.29 Burnup in discharged FAs, MWd/kg 24–28 Max operating lifetime of a FA, years 6 Heat rate (fuel elements), W/cm: average 180–220 max 290 Reactor operation time, days: scheduled 324 actual 309 Number of reactor shutdowns 5

Unscheduled shutdowns 0 Generated power, MWh 1 152 334 Generated power: thermal, Gcal 31 694 electric, MWh 189 391

Plans for 2017 and future:  To join innovation projects for the promising  To perform a calculation study on the fuel vessel-type boiling reactors; burnup criterion for the core additional sixth  To carry out preparatory work for the VK-50 row FAs; reactor decommissioning. JSC “SSC RIAR” Annual Report 2016 101

Reactor Materials Science, Methods to Test Materials and Nuclear Components

In 2016 research was continued in support Their state in terms of the key parameters, such of mixed nitride U-Pu fuel pins for the new as diameter, fuel condition, fission product generation fast reactors, such as lead-cooled distribution, gas release, is satisfactory, and they BREST-OD-300 and sodium-cooled BN-1200 have not reached the end of their operational reactors. The work is carried out under lifetime. In 2017 the examinations will be the Federal Target Program titled “Nuclear continued with the destructive ones. Power Technologies of the New Generation The radiation resistance of electrical for the Period of 2010–2015 and till 2020” materials to be used in windings of standard and integrated program of calculation electromagnetic pumps and electromagnetic and experiments in support of dense fuel. pumps-throttles of the BN-1200 reactor The post-irradiation examinations (PIE) of fuel was examined. The objective was to obtain elements from a combined experimental FA after the necessary experimental data on a change pilot operation in the BN-600 reactor were in the conductor material mechanical properties completed. The PIE objective was to obtain in order to justify the wire performance the most complete range of experimental data and to assess the wire isolation condition related to the state of irradiated fuel elements after irradiation under the design parameters. containing mixed nitride U-Pu fuel to validate Tensile testing at 290 C was performed the operational parameters and justify for the reference samples and samples the performance of the fuel composition. with stress raisers made of Х18Н10 (Kh18N10) PIE of the BREST-OD-300 dummy fuel pin with steel. They were cut out from the hexagonal the same fuel and ЭП823-Ш (EP823-Sh) steel shroud of the BOR-60 reactor blanket assembly cladding were completed after the second cycle E-65 irradiated up to the maximal damage dose of irradiation in the dismountable irradiation rig of about 150 dpa. The mechanical properties in the BOR-60 reactor up to the maximal burnup of these samples were determined. A range 3.2 % h. a. The experimental data were obtained of impact bending tests was carried out on the state of fuel and cladding after for non-irradiated and irradiated samples made high-temperature irradiation with observed of 0Х18Н10Т (0Kh18N10T) steel after treatment swelling. The examination results were needed using the equal channel angular strain method. to verify the fuel swelling and gas release The obtained data show increased (compared model at the initial stage of irradiation. to the as-delivered condition) radiation The initial examinations were completed resistance of steel in the ultra-fine grade for the fuel elements containing mixed condition. Different titanium alloy samples nitride U-Pu fuel and standard fuel elements were tested after irradiation in the MIR reactor of the combined experimental fuel assembly loop channel. The most radiation resistant after irradiation in the BN-600 reactor core during and structurally stable compositions were 290 effective days up to the maximal obtained. It was determined how the alloying burnup of 3.8 and 5.2 % h. a., correspondingly, element composition and concentration affect and the damage dose in steel of 37 dpa. a change in the short-term mechanical The examination results show that during properties of titanium alloys under the neutron operation all fuel elements kept their integrity. irradiation. 102 Management of Capital and Performance

In April 2016 two TVS-2M operated It lost its integrity due to debris damage in the VVER-1000 reactor at the fourth power unit of the cladding with some foreign object were delivered to JSC “SSC RIAR” from Balakovo located between the fuel element and the wall NPP: the untight one used during one fuel of the anti-vibration grid cell. campaign (24.36 MWd/kgU), and the reference Thermal testing was performed for irradiated one (57.17 MWd/kgU), as well as an absorber rod dispersion-type fuel elements with claddings made from the control and protection system operated of high-nickel alloy 42ХНМ (42KhNM) of different during two and a half years in the automatic design developed in JSC “VNIINM” for promising control mode containing absorber elements reactors. The test objective was to obtain with a height-arranged absorber pellets stack. experimental data to determine the maximum As for the first FA, the examinations show admissible temperature of fuel element operation that there was an untight gadolinium fuel with claddings made of this alloy. element in the third row of the bundle. It had Under the science project of the Russian a cladding defect under the twelfth spacer grid. Foundation for Basic Research it was examined It was debris damage that caused the loss how annealing affects the thermal conductivity of integrity and blind-end cladding damage coefficient of GR-280 graphite irradiated of the neighboring fuel rod and grid cells in the BOR-60 reactor. The obtained experimental where they were located. In July under data on the thermal conductivity coefficient as the industry-based project titled “Zero Fuel a function of temperature and time of annealing Failure” three VVER-1000 TVSA were delivered enable improving the accuracy in calculating for post-irradiation examinations from the Kalinin the stressed-strained state of the RBMK graphite NPP’s third power unit to find out the cause stacks under an increased operating of fuel failure. Examinations of one leaky TVSA temperature during long-term operation (40.07 MWd/kgU) were completed. A failed fuel and under abnormal conditions accompanied element was detected in the outer row. by core overheating.

Radioisotope Production

In 2016 the key objective in radioisotope Bacon Laboratories. The total calibrated activity production was to increase the production of the products supplied to the customers made output and sales. While keeping up traditional up 477.3 TBq (12,900 Ci). During the whole year radioisotopes, this objective was met by increasing except for the outage period of the reactor the production output of molybdenum-99, and process facilities, the products were delivered cobalt-60, iridium-192, californium-252, weekly, and during some months even twice selenium-75 and strontium-89, making up 90 % a week. The weekly supplied products (6 day of the sales (Fig. 4.3.4). calibration) made up 17.39–18.5 TBq (470–500 Ci). Molybdenum-99 production made The feasibility was shown to achieve the designed the biggest contribution to the radioisotope sales weekly output of 31.45–33.3 TBq (850–900 Ci) (26 %). This radioisotope was delivered to Karpov taking into account the necessary backup (10–15 % Scientific Research Institute of Physics activity). Such production output required certain and Chemistry (NIFKhI), the National Nuclear changes in the logistics clearly showing Energy Commission of Brazil, and Argentina’s the necessity to optimize the supply logistics. JSC “SSC RIAR” Annual Report 2016 103

During the whole year improvements were supplies, which corresponds to the generally continuously introduced into the process accepted standards and confirms the fact that of irradiated target reprocessing, thus ensuring our Institute is acting properly at a rather the necessary quality of the product, there sophisticated and sensitive market in terms were no claims from the customers. The number of reliability of medical-purpose short-lived of non-conformities with the specifications radioisotope supplies. and delivery dates did not exceed 3 % of the total

Fig. 4.3.4. Radioisotope sales pattern (2016)

To extend molybdenum-99 supplies, in 2016 One of the key conditions for molybdenum-99 three trial batches were delivered in special-purpose supply to the European and U.S. markets is packages, which required working out non-standard certification of the manufacturing process logistics options. The results of trial batches for compliance with the GMP requirements. certification and methods to inspect the product In cooperation with JSC Isotope a project was parameters were agreed with the end user. launched on GMP certification of the JSC “SSC On request of a Japanese customer, another trial RIAR” manufacturing process and further issuance batch is going to be delivered in 2017, and after that of authorization for product supply to the EU the commercial supplies will start. For this countries. Pre-audit of the molybdenum-99 purpose, certification of the special-purpose manufacture process was performed casks used by our Institute to ship by BeForPharma experts (Italy), based on which molybdenum-99 was completed in Japan a plan was developed to prepare the manufacture by Marubeni Utility Services, Ltd. efforts. The use for GMP certification. The certification is scheduled of these casks was authorized in December 2016. for 2017. 104 Management of Capital and Performance

As for the sales, iridium-192 took among the important achievements of 2016. the second place. In 2016 a new irradiation plan Iodine-131 was supplied weekly. It was produced was implemented. It enabled a considerable at a manufacturing facility (modernized increase in the amount of iridium loaded in 2013–2015) with the use of a new target in the reactor, and for the very first time in June area and a new multipurpose target design 2016 the iridium mass in the targets was option that can be irradiated in the RBT reactors about 465 g. This plan confirmed the feasibility and SM reactor. The designed annual both to improve the performance and keep capacity of 92.5 TBq (2 500 Ci) was achieved, to the product parameters for the customers and the feasibility was shown to increase it. to have at least 6.65 TBq/g (450 Ci/g) specific This was the first time since its establishment activity. It also improved the flexibility in 2000 when the iodine-131 manufacturing in response to a changing market condition, facility was operated under such conditions. e.g., a dramatic increase in the iridium-192 Refurbishment of the target fabrication demand. Should there be no increased demand, area to accumulate transplutonium elements the suggested plan ensures accelerated was completed. A curium target to accumulate accumulation of cobalt-60 in the same californium-252 was fabricated. Its irradiation irradiation positions. started in November 2016. The preparatory An important outcome of 2016 was work is under way to fabricate targets fabrication and transfer of startup sources with heavy isotopes of plutonium for Taishan NPP under construction (China) to accumulate curium. The commissioning to our customer AREVA (France). The customer of this area will enable reviving capabilities audited the neutron source manufacture to produce transplutonium elements. process and quality management system Twenty sealed alpha sources intended of our Institute. During this audit, it was for space research were supplied to the Physical confirmed that the current quality management Research Laboratory of the Department system complies with the international nuclear of Space, Government of India (Ahmedabad, standards. Thus, this contract gave a precedent India). After successful U.S. and EU space for RIAR-produced neutron sources to enter missions to Mars and Churyumov-Gerasimenko the international nuclear reactor construction comet where RIAR-produced alpha sources market, which will greatly boost the export were used, our Institute carried on being positions of our Institute. In addition involved in the international space programs to this contract, the neutron sources and confirmed that it kept the earlier were supplied to Beloyarsk NPP, the sources developed capabilities in developing special- were fabricated for Beijing CIAE-RIAR purpose ionization sources. Radioisotope Technology. Co., Ltd. (China), There was steady demand in strontium-89, and a great amount of sources was gadolinium-153, and tungsten-188. In 2016 made for Source Radiographics (Aust.) Pty Ltd. trial batches of lutetium-177 were supplied, (Australia) and some other customers. since the European market became more Cobalt-60 was supplied to Beijing active. In 2017 commercial supplies of this CIAE-RIAR Radioisotope Technology. Co., Ltd. radioisotope will start. Objectives for 2017 cover This is an important achievement as activities to develop the manufacturing the irradiated targets were processed under capabilities. Among them are commissioning non-typical conditions using a specifically- of the cobalt-60 sources manufacturing area, made temporary manufacturing area, since refurbishment of the iodine-125 manufacturing a new neutron source manufacturing area facility to increase the performance capacities, is going to be commissioned only in 2017. and revival of the large-scale lutetium-177 Despite a relatively small contribution production as well as cesium-131 production. to the total radioisotope sales revenue, The next year key objective is to increase the iodine-131 manufacturing process was production and sales of molybdenum-99, JSC “SSC RIAR” Annual Report 2016 105

which requires corrective actions process to comply with the GMP requirements. for the imperfections detected during regular This will make it possible for our Institute large-scale production, and what is most to enter the large European and U.S. markets. important, certification of the production

MOX Fuel Fabrication

The main activity of the RIAR’s Fuel uranium or mixed U-Pu oxide fuel using Technologies Division is fabrication of vibropac pyro-electrochemical methods as well as FAs oxide fuel for fast nuclear reactors (Fig. 4.3.5). and fuel elements using vibropac method The earlier performed R&D enabled when the fuel slug is vibropacked directly establishment of a cutting-edge engineering in the cladding. base at this Division to fabricate granulated

Fig. 4.3.5. Fabricated and customer-accepted fuel assemblies

Spent Nuclear Fuel Reprocessing and Radioactive Waste Conditioning

In 2016 spent nuclear fuel (SNF) operations were tried out under the Proryv reprocessing and radwaste conditioning (Breakthrough) project. Under the contract 106 Management of Capital and Performance

for post-irradiation radiochemical examinations and to implement a concept of homogeneous of the mixed nitride fuel, experimental data additional burning of americium in nitride were obtained on the nuclide composition fuel of fast reactors, heat treatment, sintering and mass fraction of uranium, plutonium, and gas monitoring conditions were curium, neodymium, europium, cesium, cerium comprehensively tried out in fabricating fuel and tritium, as well as platinum group elements pellets. Laboratory experiments were continued and transition metals in the mixed nitride to develop advanced pyrochemical U-Pu fuel irradiated with the use of a combined reprocessing of dense SNF. To ensure that experimental FA in the BN-600 reactor. no residual UNCl occurred in anodic dissolution Investigations were carried out in support of nitride pellets at potentials below of the methods to determine the mass fraction the uranium (IV) chloride potential, experiments of tritium, molybdenum, zirconium, rhodium, on anodic dissolution of uranium nitride and palladium in this spent fuel solution. pellets were conducted. In electrolysis of nitride To enhance hydrometallurgical processing pellets it was experimentally validated of high-burnup spent nuclear fuel after short- that no residual UNCl occurred. Experiments term storage, extraction systems were checked were carried out to fuse zinc, uranium nitride for internal alpha irradiation stability to evaluate and ЭП823 (EP823) steel. It was shown that their performance under high dose exposure. zinc “wet out” uranium nitride pellets, Alternative extraction processes were tried and an additional process not covered out to separate transplutonium elements by the current technology was necessary from the PUREX first cycle raffinate. to remove traces of zinc from the pellets During the experiment no third phase, surface. Uranium nitride pellets were stable precipitate or interphase film was observed. in molten media, and their destruction It was continued to experimentally check in the experiments conducted before refabrication of mixed nitride fuel with minor by Siberian Chemical Combine (JSC “SKhK”) actinides. Carbothermal synthesis was and the Institute of High Temperature performed for the mixed nitride (U, Pu, Am)N. Electrochemistry of the Ural Branch of Russian To produce the given nitride composition, Academy of Science (IHTE UB RAS) the conditions and modes to mix and sinter was associated with low quality of the used the initial dioxides of uranium, plutonium dummies. The process to prepare electrolyte and americium were selected. The initial using “soft”* chlorine treatment of uranium oxide powders were dispersed with soot metal was checked experimentally. and heat-treated under extra pure nitrogen. The average rate to dissolve uranium metal Ceramic pellets were later fabricated using with cadmium chloride was more than heat-treated pressed-powder bricks, which 0.6 g/(hcm2) with obtaining 15.1 % mass were sintered under the extra pure argon- fraction of uranium in salt. To enhance hydrogen (8 %) mixture. In these ceramic the methods for online analytical monitoring pellets produced by the carbothermal synthesis of SNF pyrochemical reprocessing parameters, of the mixed nitrides (U, Pu, Am)N, plutonium experiments were carried out on application and americium content was obtained. of the laser-induced breakdown method. Their phase composition was examined as well. It was experimentally shown that this The plutonium-americium ratio was constant method could be used for ongoing

in the initial (Pu, Am)O2 and in the produced in-process monitoring of dissolution. mixed nitride U-Pu fuel powder and sintered pellet. It confirms that americium is fully kept in the fuel composition after sintering. To succeed in homogeneous inclusion ______of americium into the fuel compositions * A process to dissolve actinides in molten salt by chemical based on mixed nitride U-Pu fuel exchange of a more electropositive element with chloride or electrolytic refining of nitride fuel in a hot cell. JSC “SSC RIAR” Annual Report 2016 107

To develop an innovative process for reprocessing oxide with ensuring low content of residual of spent nuclear fuel in molten molybdate, actinides in electrolyte. a method to remove excessive molybdenum Thus, in 2016 research was successfully oxide was checked experimentally in order continued in support of all stages of SNF to reduce residual concentration of nuclear reprocessing and radwaste management. materials in electrolyte. The latter is the key The near-term plans are to continue research challenge in introducing molten molybdate as in promising trends and verify the results a promising medium for reprocessing. A way of laboratory experiments with real spent was found to remove excessive molybdenum nuclear fuel.

Shipping Services

Keeping in mind that radioisotope companies not only to Russia and CIS, shipments are an integral aspect but also to the EU Member States, such as of the production cycle, JSC “SSC RIAR” pays Germany, Czech Republic, Poland, Spain, particular attention to building logistic France, etc. Our Institute has a great number capabilities, updating special-purpose of special-purpose shipping casks equipment, optimizing logistics setups that have international certificates and improving the quality of the rendered for the shipment of radioactive goods services in full compliance with the safety and special-purpose vehicles equipped requirements. At present, JSC “SSC RIAR” according to the European Agreement arranges shipment of Russian radioisotope concerning the International Carriage products including RIAR’s own products of Dangerous Goods by Road (Fig. 4.3.5). and products made by other Russian

Fig 4.3.5. Special-purpose vehicles of JSC “SSC RIAR”

108 Management of Capital and Performance

At present, RIAR’s vehicle fleet includes code assigned to the companies involved ten trucks of different capacity. in transit of goods and filing customs In 2016 there were about 300 shipments declarations to the EU Member States. of radioisotopes. A considerable number JSC “SSC RIAR” has a permanent license of road shipments were done to the near of the National Atomic Energy Agency and far abroad. of Poland for the transit and carriage Along with shipment of radioisotopes, of radioactive materials in Poland RIAR’s logistics departments render multiple and a license for the carriage of high-level services to the Russian and international radioactive materials in the Czech Republic customers on arranging and ensuring expiring on December 31, 2020. site delivery and return of other products JSC “SSC RIAR” is targeted at further involved in research and production. building logistics capabilities to enhance its For example, nuclear fuel samples, performance and render a full range of services structural materials and natural minerals to meet Russian and international customers’ treated by irradiation. JSC “SSC RIAR” is requirements. a member of the EORI. It has the unique

The ANNUAL SCIENCE REPORT OF JSC “SSC RIAR” gives more details about 2016 activities carried out in nuclear research reactors MIR, RBT-10/2, BOR-60, SM, RBT-6, and VK-50 and critical test facilities of reactors SM and MIR, as well as research in fuel elements and reactor materials, fuel and nuclear fuel cycle components, transuranium elements, radionuclides and ionizing sources, SNF and radwaste management, radiation and environmental safety. This Report covers the key research performed at RIAR in 2016: http://niiar.ru/annual_report

JSC “SSC RIAR” Annual Report 2016 109

4.4. International Activities

In line with efforts to enhance the effectiveness of utilization its unique experimental capabilities and increase the portfolio of overseas orders, JSC “SSC RIAR” is ambitiously building international R&D and developing relationships with international customers. In 2016 the earlier research was continued and new contracts were signed. Fifteen technical reports in paper and electronic versions were issued and handed over to our customers under more than ten long-term contracts in full compliance with the export control requirements based Fig. 4.4.1. Memorandum signing ceremony on licenses issued by the Federal Service for Technical and Export Control. The international customers of JSC “SSC  JSC “SSC RIAR” became an IAEA designated RIAR” have traditionally been companies International CEntre based on Research and national labs from France (AREVA, CEA), Reactors (ICERR) to implement joint the USA (TerraPower, ANL), the Republic research and development projects**. of Korea (KAERI), Ukraine, Japan, etc. The plaque designating RIAR as an IAEA During 2016, RIAR experts held active dialogue International CEntre based on Research with international partners and performed Reactors was handed over in Vienna pre-contractual activities on preparing on September 26, 2016 (Fig. 4.4.2). new long-term contracts to perform irradiation, The official ceremony was preceded PIE, research in materials science, by great preparatory work done by RIAR radiochemistry and minor actinides and ROSATOM experts in cooperation handling. with the IAEA representatives. The ICERR Among the key 2016 achievements audit mission team was led by Andrea Borio confirming that JSC “SSC RIAR” is a recognized di Tigliole, Head of the IAEA’s Research world’s center for research in support Reactor Section at the Department of sustainable development of the world’s of Nuclear Energy. During the visit nuclear power are as follows: to the RIAR’s site in July 2016, he noted  Signing of the memorandum of understanding wide experimental capabilities of our on scientific and technical cooperation Institute, its great expertise and high level between JSC “SSC RIAR” and KAERI on June 2, of motivation of its employees. 2016 in Dimitrovgrad*. (Fig. 4.4.1).

*For more details check the official website of JSC “SSC ** For more details check the official website of JSC “SSC RIAR”: http://niiar.ru/node/4307. RIAR”: http://niiar.ru/node/4374. 110 Management of Capital and Performance

In 2016 RIAR’s scientists and experts joined different working groups, technical meetings and workshops held under the auspices of international organizations. RIAR’s professionals attended more than 20 international scientific and technical conferences making presentations on the key outcomes and promising trends of RIAR’s activity, including well-regarded events, such as:  International Sci-Tech Workshop on Experience in Operating Russian-

Fig. 4.4.2. IAEA Director General Yukiya Amano Produced Nuclear Fuel at VVER-1000 NPPs and Rosatom CEO Sergey Kirienko (Nesebar, Bulgaria); at the official ceremony during  9th International Conference on Nuclear the IAEA's 60th General Conference and Radiochemistry (Helsinki, Finland);

29th Annual Congress of the European  Association of Nuclear Medicine (Barcelona,  The OECD Nuclear Energy Agency team led Spain); by Jim Gulliford, Head of the Data Bank  Fifth International Conference “Engineering visited JSC “SSC RIAR” on October 17–18, of Scintillation Materials and Radiation. 2016 (Fig. 4.4.3). The RIAR’s Management Technologies” ISMART 2016 (Minsk, and NEA’s experts outlined the promising Belarus); cooperative venues and agreed on the efforts to utilize the research  37th International Workshop on Reduced capabilities of our Institute in implementing Fuel Enrichment for Research Reactors international projects and encourage (Brussels, Belgium).

RIAR’s experts to join international project teams and expert groups. During 1–3 June 2016 ROSATOM’s Innovation Management Division held an international workshop at RIAR on establishment of the MBIR-based International Research Center*. This workshop (Fig. 4.4.4) was attended by Russian companies and enterprises of ROSATOM, the IAEA experts, as well as representatives from CEA, Institute for Energy Technology (Halden), Belgium Nuclear Research Centre (SCKCEN), Korea Atomic Energy Research Institute (KAERI), Japan Atomic Energy Agency, South African Nuclear Agency Corporation, TerraPower (USA) and Nuclear Research Institute

Fig. 4.4.3. OECD NEA representatives during Rez (ÚJV Řež, a. s.).

their visit to RIAR

* For more details check the official website of JSC “SSC RIAR”: http:// niiar.ru/node/4303. JSC “SSC RIAR” Annual Report 2016 111

attract great attention of the international experts. RIAR’s site is visited both by our international customers to review the current work progress and discuss the outcomes and by our potential partners who seek to conduct research or radioisotopes supply.

In 2016 150 professionals from 17 countries from all over the world visited JSC “SSC RIAR”.

Fig. 4.4.4. Workshop on establishment of the MBIR-based International Research Center

To ensure sustainable development of the international R&D and encourage young employees to be engaged in collaboration JSC “SSC RIAR” being the basic with international customers, the English organization of the CIS member states language courses are delivered for RIAR’s in ensuring safety of the nuclear research scientists and engineers. In 2016 more than installations finalized and issued a book titled 30 RIAR’s professionals attended the English “Nuclear Research Installations of the CIS language courses. The training was provided Member States”* with the financial support by RIAR’s highly professional interpreters. of the IAEA. The book presents updated The first outcomes were greatly appreciated complete data related to 80 research reactors, by the RIAR’s Management. In 2017 the English critical and subcritical facilities available language courses will be continued. at the experimental sites of 23 organizations In 2016 consistent efforts were made from five member states (Fig. 4.4.5). aimed at creating a sustainable platform and further building international activities and R&D collaboration with RIAR’s international partners. Following the results of 2016, the portfolio of overseas orders was about USD 60 mln, and multiple international contracts clearly show that the experimental capabilities of our Institute, scientific expertise of its professionals and science-intensive products are in great demand and are competitive at the world’s high-tech market.

Fig. 4.4.5. Book on nuclear research installations of the CIS member states

Traditionally, the infrastructure and experimental facilities of our Institute

* For more details check the official website of JSC “SSC RIAR”: http://www.niiar.ru/node/3860. 112 Management of Capital and Performance

4.5. Human Capital

HR management is one of the most labor- besides RIAR’s involvement in the basic intensive processes in the organizational educational programs. There are 48 current management affecting directly the integrity agreements with 27 Russia’s higher educational and effectiveness of the business processes institutions and cooperation agreements at the Institute. The current HR management in different areas of activity. In 2016, system serves a great number of functions, 510 undergraduates received hands-on training and every system process has many of its own at RIAR. subtasks. The HR team seeks to provide RIAR In 2016, RIAR’s staff members and veterans with highly-qualified and skilled staff and improve of labor enjoyed benefits and guarantees under its performance. the current collective bargaining agreement. Summarizing the 2016 outcomes, it should The housing program continued to be be noted that the staff turnover in 2016 decreased implemented to include 34 more staff members. making up 1.21 %. The average age of the staff Support was provided for retired employees, as stood at 45.6, which is the most fruitful time well. A voluntary health insurance agreement in human life. Continuing the mentorship traditions, was signed for the employees to undergo medical 323 staff members are mentors for young rehabilitation at Russian health resort employees and newcomers. and rehabilitation centers and get additional Enhanced IT systems enable RIAR to keep medical care. statistics on HR processes, review and interpret Without any doubts, 2016 made a good the results. The HR management team deals mainly start for our Institute to resolve complicated with the staff sourcing, recruitment, engaging, tasks in the future. Highly qualified staff, great onboarding and training. RIAR collaborates potential and willingness to achieve the set with higher educational institutions in education goals will allow us to successfully meet all and training, which suggests joint R&D activities objectives. JSC “SSC RIAR” Annual Report 2016 113

Human Capital Management

The most precious RIAR’s value is a team (Table 4.5.1). It is human resourcing to ensure of highly-expertized professionals who help us viable business aiming at a maximized shareholder to achieve good results over all these years. That is value of the Institute, its fully functional business why the key components of RIAR’s social policy are model within the scope of strategic objectives, as staff training, development, motivation, social well as a considerable growth in the business scope programs and social responsibility. All these aspects and profitability due to human capital are set forth in a collective bargaining agreement, augmentation, which implies both an increased which is applicable to all staff members of the number of the staff and capacity building, career Institute (Fig. 4.5.1). The human capital and professional development, and better working management strategy is based on the RIAR’s conditions. mission and the top priorities of ROSATOM

G4-11

Fig. 4.5.1. RIAR's staff conference

HR management regulating documents

 Labor Code of the Russian Federation.  Agreement on nuclear power, industry and science for the period of 2015–2017.  Common procedure on performance management of ROSATOM and its organizations.  Code of Conduct of JSC “Science and Innovations” and organizations under its supervision.  Charter of JSC “SSC RIAR”.  Internal work regulations of JSC “SSC RIAR”.  Standard of Enterprise STO KP 086-416-2016 “Integrated Management System of JSC “SSC RIAR”. HR Management”.  Provision on performance appraisal of JSC “SSC RIAR” staff members.  Labor bargaining agreement between JSC “SSC RIAR” and its staff members (effective 2014–2017).  Main provisions on work arrangement for JSC “SSC RIAR” staff members. 114 Management of Capital and Performance

Table 4.5.1 Human capital management strategy of JSC “SSC RIAR”

Aspect Activities

Human resourcing in compliance  RIAR is provided with highly-qualified and skilled professionals through with the HR Policy of JSC “SSC RIAR” attracting best experts, staff efficient selection, training and development, implementation of the integrated assessment system and career planning.  The talent-pool development program is enhanced to make well-arranged selection and appointment of the candidates to the key positions using RIAR’s own internal talent pool; compiled are succession plans for the critical positions.  A knowledge management system is implemented and motivation is provided to keep and transfer the key knowledge to young professionals using the mentorship system.

Enhancement of HR management efficiency  The unified HR management system is operational making the following processes computer-aided: keeping the organizational structure and schedule; HR management; working time schedule and recording; payroll; employee performance management; analytics and statistical reporting; paperwork related to business travels, vacation schedule, financial aid to the staff members; preparing and approval of award documents.  Involvement in the projects on introducing the ROSATOM production system, thus enabling HR services to be improved, and the work of the HR service to be arranged in a more efficient way.  Reduction in the staff costs including reduced travel costs and healthy meal costs, decreased insurance amount as a result of assigning relevant subclasses of the working conditions to the staff working in harmful conditions.

Development of corporate culture targeted  Common principles and approaches on HR management are ensured at outcomes, self-enhancement in all presence regions taking into consideration local peculiarities. and innovations  Use of ROSATOM values to attract professionals and build their career.  Updated is the Code of Conduct of JSC “Science and Innovations” and organizations under its supervision. This Code sets forth the rules and regulations of business communication. It describes the principles of ethical conduct serving a tool to prevent possible violations and disputes. New staff members agree that they accept the Code provisions by personal signature on an acceptance sheet kept on a personal data file.  Participation in the surveys on ROSATOM’s staff involvement JSC “SSC RIAR” Annual Report 2016 115

Social policy and HR management outcomes

As at December 31, 2016 the total number overview. In 2016, staff turnover made 1.21 %, of RIAR staff members was 3,349 including which is by 0.33 % less than the one in 2015. 3,317 full-time employees and 32 part-time In 2016, 112 staff members had the right G4-10 employees. Compared to 2015, the number for maternity and parental leave and took this of employees decreased by 8 %, which resulted benefit; 30 staff members returned to work after from the implementation of the financial maternity and parental leave; and 28 staff members rehabilitation program in 2016 to optimize continued working during 12 months after they LA3 the number of the staff members. The average age returned from maternity leave. In accordance of the staff members is 45.6, the percentage with the labor law, the minimum period to notify of the staff members aged 35 or less is 26.2 %; the employees about important changes LA4 1,806 (53.9 %) staff members out of 3,349 have in the company’s activities is stated higher education degrees including 443 (24.5 %) in the labor bargaining agreement making up employees who have industry-specific education. at least two months. Figures 4.5.2–4.5.8 provide a more detailed staff

LA1

Fig. 4.5.2. Number of the staff by gender Fig. 4.5.3 Number of the staff by age

LA12

Fig. 4.5.4. Total labor force by the contract type Fig. 4.5.5. Average age of the staff members 116 Management of Capital and Performance

LA12

Fig. 4.5.6. Staff structure Fig. 4.5.7. Staff composition and structure by categories by categories and age

production and economic outcomes, LA1 performance enhancement and professional development. A provision on remuneration in RIAR is based on the Unified remuneration system (URS). One of the remuneration basic principles in RIAR is providing equal opportunities for different age-gender groups. Salaries of the staff members depend on their position, professional capabilities and outcomes (Fig. 4.5.9). At that, there is no difference between the men’s and women’s basic salary. JSC “SSC RIAR” exercises its best efforts to assess the outcomes of its employees in a decent way. Our Institute offers competitive minimum and average wages. In accordance with the industry’s agreement on nuclear power, industry and science Fig. 4.5.8. Staff turnover for the period of 2015–2017, RIAR undertakes by age and gender to set the minimum wages at the 1.3 living wage and higher (Table 4.5.2). By late 2016 the minimum wages made up 13,300 rubles. According to economists and sociologists, Remuneration one of the key components illustrating social tension among the staff members is a decimal The remuneration system of JSC “SSC RIAR” coefficient that describes contrast in wages and employee benefits are targeted between 10 % high-paid and 10 % low-paid at compensation in exchange of good staff. The world’s best practice considers this coefficient ranged from four to six to be JSC “SSC RIAR” Annual Report 2016 117

optimal. In recent years our Institute has Table 4.5.2 the optimal decimal coefficient (Fig. 4.5.10). Minimum wages averaged EC5 The reporting year shows a growing trend in terms of labor productivity and average wage compared to 2015 (Fig. 4.5.11). Labor Average, thou. rubles Job productivity growth made up 35 %, and average RIAR Dimitrovgrad monthly wage growth was equal to 21 %. In 2016, RIAR’s staff expenses were 2, 204 million Cleaning manager 13.5–15 9–12 rubles (Table 4.5.3). General worker 15–16 10–12

Fig. 4.5.9. RIAR wage structure

Fig. 4.5.10. Decimal coefficient 2014–2016. Fig. 4.5.11. Dynamic pattern 2014–2016 and future: a — labor productivity (thou. rubles/person); b — average monthly wages (thou. rubles) 118 Management of Capital and Performance

Table 4.5.3 Staff expense structure

Value by year, million rubles Name 2015 2016 2017 Staff expenses 2 041 2 204 2 372 Including Payroll 1 492 1 653 1 770 Social expenses 37 34 32 Staff recruitment and development expenses 2.6 1.8 4.5 Taxes 509 515 566 (insurance)

Social Policy and Corporate Culture In compliance with the labor laws, the labor bargaining agreement intended for all staff relations at RIAR are regulated by a collective members (Fig. 4.5.12).

Fig. 4.5.12. Purposes to regulate labor relations at RIAR

JSC “SSC RIAR” provides employment for full or partial suspension of production resulting each of its staff members under the employment in worse working conditions or reduced staff contract and acts in accordance with the Russian number, could only be possible after prior law, the Charter of RIAR, industry’s agreement notice at least three months before such and collective bargaining agreement to keep changes take place. Within the framework working positions. Any change in the activity of the common social policy of ROSATOM of RIAR and its subdivisions including and corporate social programs, RIAR annually liquidation, change in ownership or legal form, increases expenses (Table 4.5.4). JSC “SSC RIAR” Annual Report 2016 119

Table 4.5.4 Social expenses in 2016

Indicator Actual expenses, thou. rubles

Social expenses 28 580.0

Payments to retirees 4 499.0

Vouchers to recreation centers for children 1 639.0

Social payments 17 401.0

Financial assistance to the staff members 8 114.0

Financial assistance to young professionals when employed 184.0

Payment (partial compensation) for housing rent 2 229.0 Supplementary incapacity allowance exceeding the amount stated by the 0 Russian law Additional leave (above the standard value established by the Labor Code of 6 472.0 the Russian Federation) Childcare benefit for children aged 3 or less 402.0

Cultural and social events 2 546.0

Trade union 1 612.0

Sport events 791.0

Insurance 4 788.0

Healthcare 1 205.0

TOTAL* 34 481.0

* Excluding healthy meals and charity.

Housing program

In 2016, RIAR continued the implementation professionals and 150,000 rubles for highly- of a housing program launched in 2015 qualified experts. The initial payments under to attract young professionals and improve their the loan can be made in two years, living conditions. This program enables young and the whole loan can be paid during 10 years professionals and highly-qualified experts at most. In 2016, 12 interest-free loans were to buy flats at reduced rates: 28,000 rubles per given to young professionals and 18 such loans square meter (while the average rate were received by highly-qualified professionals. in Dimitrovgrad is 36,000 rubles per m2.) The total amount of such loans was 6 million In addition, the program offers an interest-free rubles. During 2015-2016, 156 professionals loan to make initial payment for those who bought flats under this program in this new want to take out a mortgage to buy a flat. housing area (Fig. 4.5.13). This loan amounts to 300,000 rubles for young 120 Management of Capital and Performance

Fig. 4.5.13. New housing area

Health enhancement Annually, RIAR performs rehabilitation staff members were partially paid 1, 639, 000 rubles activities in a health resort center under its for vouchers. supervision for its staff members and retirees who need health resort and preventive treatment for medical reasons (Fig. 4.5.14). In 2016, 438 RIAR In 2016, a deposit agreement was signed staff members and 148 retirees improved their with the insurance company “SOGAZ” health condition. For the first time under amounting to around 3 million rubles the health enhancement program, four health on rendering medical services to RIAR’s staff campaigns were arranged for RIAR’s staff members members under voluntary health insurance and their children to include 91 children. agreements. As for children health holiday camps in Dimitrovgrad and Ulyanovsk region, 155 RIAR

Fig. 4.5.14. Medical services rendered under voluntary health insurance agreements

Corporate culture

The key 2016 event was celebration in Dimitrovgrad attracting over 11 thousand of the 60th anniversary since RIAR establishment people. The official ceremony to award nuclear (Fig. 4.5.15). A great number of events were held professionals was held at the Slavsky Conference JSC “SSC RIAR” Annual Report 2016 121

Hall. Traditionally on that day the Scientific The bike ride was joined by 47 families Board grand meeting took place attended of the RIAR’s staff members (Fig. 4.5.16). by the representatives of ROSATOM companies, management of many public organizations, educational institutions, and nuclear experts. On that very day a ceremony of planting lilac walkway was held. The Youth Board and Veterans Board of RIAR, as well as RIAR’s management and dear guests joined the time capsule burying event. The time capsule contained messages to the next generations of nuclear professionals. An intellectual quiz show dedicated to the RIAR’s 60th Anniversary was held among secondary school teams. As for the sport events coinciding with the RIAR’s jubilee celebration, a massive Fig. 4.5.15. Official ceremony to celebrate th bike ride took place on Physical Education Day. the 60 anniversary since RIAR establishment

Fig. 4.5.16. Bike ride participants

Another key event arranged at the initiative young people for allegiance to the country, of ROSATOM's Public Council was the municipal respect for older generations, and pride phase of an All-Russian creativity contest in the Russian nuclear industry achievements. to perpetuate the living history of the emergence About 400 schoolchildren from Dimitrovgrad took and development of the Russian nuclear industry. part in this event. The video clips contained The contest main objectives were to transfer the information about more than 30 RIAR’s the knowledge and best practices from older veterans (Fig. 4.5.17). generations to the younger ones and educate

Fig. 4.5.17. Participants of the creativity contest 122 Management of Capital and Performance

On the eve of Nuclear Industry Day, a book RIAR’s professionals were involved in making this titled “RIAR — 60th Anniversary: People, Years, book (Fig. 4.5.18). In 2016, the book copies were Achievements” was presented. More than fifty handed over to 105 RIAR’s veterans.

Fig. 4.5.18. Handing over the books to RIAR’s veterans

In 2016, a traditional Youth Forum was and students. The training course covered lectures held through scientific, cultural and sports and practical training on project management, collaboration between JSC “SSC RIAR” and DETI integrated project risk management methods, NRNU MEPhI with the support of the Nuclear innovative manufacturing process management, Innovations Cluster Development Center goal focus, etc. For the first time at this forum, with a goal to create conditions for the youth an on-the-job training reports competition professional, creative and public self-fulfillment. was held among the students. The students This forum was attended by 80 participants. with the best reports won money certificates All the participants were divided into two and souvenirs with corporate logos educational flows: RIAR’s young professionals (Fig. 4.5.19).

Fig. 4.5.19. Participants of the traditional Youth Forum JSC “SSC RIAR” Annual Report 2016 123

In November 2016, Ulyanovsk and Defense” marks, four silver and four bronze and Dimitrovgrad welcomed a science film marks (Fig. 4.5.20). festival held by a network of the nuclear energy In 2016, activities were carried out information centers with the support targeted at creating and developing of ROSATOM. The festival covered several a networking system of educational institutions municipal areas where science films of all types to ensure HR development were shown, lectures and workshops took and establish a modern library center in order place. to improve public awareness and ensure In 2016, JSC “SSC RIAR” became the first sustainable intellectual and cultural among other companies in Ulyanovsk region development. Multiple wide-scale cultural to participate in the regional phase of the All- events took place, such as quiz show; Russian physical culture campaign “Ready opera festival; theatre festival; international for Labor and Defense”. Following the 2016 music festival; All-Russian jazz festival under results, over 50 RIAR’s staff members the ROSATOM’s “Territory of Culture” project; successfully reached the qualifying standard multiple exhibitions; on-stage performances; winning sixteen golden “Ready for Labor professional and industry’s celebrations.

Fig. 4.5.20. Alexey Koshaev, Mayor of Dimitrovgrad, and Stanislav Donets, Swimming World Champion, giving the “Ready for Labor and Defense” marks to RIAR’s staff members. Reaching the qualification standards

Staff involvement

Annually, RIAR conducts an involvement survey, which is the key indicator of how staff members perceive their work in RIAR. In 2016 questionnaires were distributed among 747 employees from 15 RIAR subdivisions (Figs 4.5.21, 4.5.22, Table 4.5.5). The results obtained from these questionnaires and focus groups are used by the RIAR management to compile annual plans on improving the involvement rate.

4.5.21. Staff survey 124 Management of Capital and Performance

Table 4.5.5 Involvement survey data

Value by years, % Factor

2014 2015 2016 Top managers 48 47 39 Line managers 70 69 71 Colleagues 74 75 72 Staff value 48 49 38 Scope of work 75 74 76 Satisfaction with results 76 76 78 Independence 62 64 62 Resources 44 48 43 Processes 50 52 51 Wage 35 29 31 Fringe benefits 48 47 40 Acknowledgement 48 41 39 Career opportunities 47 50 49 Training and development 57 55 55 Feedback 68 65 64 Employer reputation 60 54 55 Employer image concurrence 58 54 59

4.5.22. Questionnaire results Work/personal life balance 68 65 65 Working conditions 73 70 71

HR Policy Highly-qualified and skilled professionals

The key projects on RIAR development Ulyanovsk, and Kazan on the basis of DETI NRNU require involvement of highly-qualified MEPhI, UlSU, UlSTU, Kazan State Power professionals. Therefore, RIAR management Engineering University, etc. RIAR management, pays much attention to sustainable staffing. HR Office and PR Office professionals are greatly In our Institute there are current programs involved in such campaigns. This interaction on interaction with young people with young people will provide further and mentorship development, as well RIAR staffing with local population. as the Provision on Hands-on Training of Students Keeping this objective in mind, RIAR in JSC “SSC RIAR”. Campaigns involving arranges regular technical visits to its site: schoolchildren are targeted at their career annually, schoolchildren and students orientation and understanding the prospects of Dimitrovgrad, Ulyanovsk and neighboring of training in RIAR-needed specialties. Such regions like Samara and Penza region, campaigns include, for example, open days and the Republic of Tatarstan visit and career fairs arranged in Dimitrovgrad, our Institute (Fig. 4.5.23, Tables 4.2.4 and 4.2.5). JSC “SSC RIAR” Annual Report 2016 125

Fig. 4.5.23. Schoolchildren on a technical tour to RIAR

In 2009 the Children Nuclear Medical An essential in resolving RIAR-sponsored Academy was established in Dimitrovgrad, training objective is engagement of higher and since then it has been functioning educational institutions. In addition to RIAR’s successfully. The major Academy objective is involvement in major educational programs, in-depth learning of practical aspects in Physics, such engagement implies joint R&D. Chemistry, IT and foreign languages. The Academy There are 48 current agreements aims at developing individual’s motivation on joint activities in different areas signed to learning and creativity, providing additional with 27 Russian higher educational institutions. opportunities to meet educational needs Besides, there are long-term contracts of children and teenagers in out-of-school with Dimitrovgrad schools implementing activities and leisure time. Lecturers advanced educational programs and secondary at the Academy are RIAR researchers, leading vocational educational institutions. RIAR Russian scientists and university professors collaborates with higher educational institutions from Dimitrovgrad, Ulyanovsk, and Moscow. as follows: The key indicator describing RIAR 1. Hands-on training: introductory, on-the-job, interaction with young people is employer- research, and undergraduate training. sponsored target enrolment of school leavers Following the 2016 results, seven graduates in leading higher educational institutions to be of higher educational institutions including trained in RIAR-relevant specialties. Following four RIAR-sponsored graduates were the 2016 results, 24 persons including employed by RIAR. The relation of expenses 6 postgraduates enrolled eight higher educational to support industry-oriented higher educa- institutions of Russia under the employer- tional institutions to the number of young sponsored education program. Employer- professionals graduated from these educational sponsored training of RIAR employees is institutions and employed by RIAR in 2016 performed in accordance with the Collective made up 52, 168.77 rubles per person. bargaining agreement for the period of 2014– 2. Engagement of leading RIAR professionals 2017. At present, among employer-sponsored in training. In 2016, 20 RIAR professionals trainees there are 30 RIAR staff members fully were engaged in training in DETI NRNU or partially paid for training depending MEPhI and Ulyanovsk State University (UlSU). on their performance. To enhance the efficiency and perform

RIAR-sponsored training there are basic departments established in these universities In 2016 Russia’s higher educational headed by RIAR Director (DETI NRNU MEPhI) institutions had 317 RIAR-sponsored students. and an expert of the Department for R&D

126 Management of Capital and Performance

Management and International Activities 4. Joint R&D. In implementing joint R&D (UlSU). projects there is a unique opportunity 3. Involvement in higher educational institution to involve students in joint research related management. The members of the DETI to RIAR activities. Such projects enable NRNU MEPhI Academic Board are three RIAR to attract young professionals. RIAR’s professionals. The above activities resolve the highly- qualified staffing objective.

Staff development

In 2016, 815 managers and professionals to annually assess the staff expertise. were trained under different training There are criteria for each staff category: programs (Table 4.5.6). The training expenses made managers, professionals, workers, and office up 3,486 thou. rubles. workers. Building and development the talent Table 4.5.6 pool provide wider opportunities for career Average training hours growth, expertise enhancement, and increase LA9 by employee categories in motivation and involvement, thus helping RIAR to keep unique experts and gifted professionals in the nuclear industry Category Men Women and reducing the dependence on the job market (Figs 4.5.24, 4.5.25). The talent pool Managers: is a priority source for appointment to vacant top level 72 72 or newly established management positions. middle level 72 72 Outside candidates are appointed only in cases bottom level 72 72 when there is no right candidate in the talent pool. A multistage talent pool is being Professionals: developed in RIAR to plan career Capacity building 72 72 of the key professionals considered under compulsory for management and critical positions. education 42.6 42.6 Managers and professionals are involved in industry’s educational and development Workers 35.2 35.2 programs. In 2016, three RIAR managers (middle-level) were included in the program “ROSATOM’s Capital”, and one manager Performance of the stuff is assessed (bottom-level) was included in the program regularly to find out how well the employees “ROSATOM’s Talents”. Establishment of the talent match their positions, to enhance their pool development system resulted in a changed performance, business capacities, attitude towards the leader role in the nuclear and financial incentives, and to further industry. The talent pool development improve staff selection and appointment. programs help those involved to increase their Provision on RIAR staff appraisal procedure motivation to change consciousness and behavior defines the process and due models, and give tools to broaden dates. A ROSATOM’s corporate competence the management portfolio. model and corporate criteria are used JSC “SSC RIAR” Annual Report 2016 127

LA11

Fig. 4.5.24. Regularly assessed and developed staff by gender and categories, %

Fig. 4.5.25. Talent pool development 128 Management of Capital and Performance

4.6. Natural Capital

The last year passed under the implementa- The last year was marked by the initiation tion of the financial rehabilitation program of the ecology-related management system of the Institute. For engineering services, and by the implementation of safety it primarily meant increasing the efficiency of all management tools based on environmental types of resources: human, natural, financial. policy and identified significant environmental The implicit and main task was to ensure aspects. The results of the system implementation the safe functioning of all the facilities are more than encouraging: during the year, of the Institute. In order to assess the level the amount of radioactive substances released of safety and to inform the public about into the atmosphere and the volume of generating the importance of events related to radiation low- and intermediate-level liquid radioactive sources from the safety point of view, waste has been reduced by no less than 12 %. JSC “SSC RIAR”, as well as other ROSATOM’s In the reporting period, the startup work enterprises, uses the International Nuclear was continued under the Federal Target Program and Radiological Events Scale (INES). It covers all “Provision of Nuclear and Radiation Safety types of practical activities and is intended for the year 2008 and up to 2015”: “Renovation to assess the events occurring during and Ensuring the Safety of the Solid Radioactive the implementation of these activities. Waste Storage Facilities” and “Renovation For the reporting period, no significant and Rehabilitation of the RIAR’s site Industrial safety-related event (above level 0 on the INES Storm-Water Sewage”. The facilities will be put scale) occurred at the radiation facilities into operation in 2017. The projects will greatly of the Institute, which corresponds improve the RIAR’s ability to manage radioactive to the international safety criteria. waste and non-radioactive sewage as well as Another acknowledgment of the high provide a better level of safety and reduce level of safety culture is the designation the impact on the environment. to the Institute the status of the IAEA International The confirmation of greater attention Center based on Research Reactors (ICERR). to the issues of ensuring the safe functioning This fact confirms the correctness of the chosen of all facilities of the Institute is the significant direction for the implementation of international amount of funds invested by the enterprise management standards in the field of quality in the implementation of environmental and ecology. Last year the Institute successfully protection measures. For 2016, current passed through the QMS audit to comply costs and investments of JSC “SSC RIAR” with ISO 14001:2004 (GOST R ISO 14001-2007) for environmental protection amounted and ISO 9001:2008 (GOST ISO 9001-2011). to about 152 million rubles.

JSC “SSC RIAR” Annual Report 2016 129

Ecological Policy, Ecological Management System

Environmental policy is the driving force that quality indicators, standards for water disposal ensures the implementation and improvement and water consumption). of the organization's environmental management Indicators of environmental efficiency system. It creates the basis for establishing of the enterprise demonstrate the achieved level the organization's goals and objectives and reflects of safety and compliance of the existing the obligations of the top management to act environmental management system in accordance with the applicable requirements with the requirements of GOST R ISO 14001 of environmental legislation and principles 2007. The main achievement is the complete of pollution prevention. fulfillment of the environmental goals set The ecological policy of JSC “SSC RIAR” in terms of reducing the level of radiation developed on the basis of the corresponding policy impact on the environment. It should be of the ROSATOM State Corporation, approved noted that the continuous improvement and enforced by the order of the Director of the environmental management takes place No. 64/600-P dated September 14, 2015 (the text on the basis of self-formulated goals of the environmental policy is available on the and applicable legislative requirements. official website: http://niiar.ru/?q=ecological Since 2017, the updated version of GOST R policy) defines the purpose, basic principles ISO 14001-2016 comes into force. The new version and obligations in the field of environmental specifies the requirements for the environmental protection and ensuring environmental safety. management system and introduces new concepts Its key provisions are: such as leadership, commitment, success factors,  priority of nuclear and radiation safety and the organization's environment. It is essential in the short term and in the long term; to introduce mandatory requirements to take risks  limiting the company's impact on personnel, and opportunities into account, apply the system public and environment by the permissible approach. In the new reporting period, it is planned impact standards; to analyze the acceptability of new requirements  compliance with the norms of resource and adopt a decision on the environmental consumption and energy efficiency; policy of the Institute. A systematic approach to environmental management can provide top  implementation of industrial (environmental) management with information to succeed control; in the long term and promote sustainable  education of managers and specialists development through: of environmental culture and safety culture;  environmental protection by preventing  continuous improvement of the integrated or mitigating adverse environmental impacts; quality management system and ecology;  mitigating the potential adverse environmental  constant improvement of the QMS and EMS. impact on the organization; The implementation of the environmental  assisting in the implementation policy of JSC “SSC RIAR” is carried out in accordance of commitments; with the plan for the period until 2018. The activities of the Institute are carried out  improvement of environmental performance; in relation to the following environmental  management or influence on the methods aspects: energy, water, biodiversity, emissions, of designing, manufacturing, supplying, discharges and waste, products and services, consuming and disposing the organization's compliance with requirements transformed products using the life-cycle concept, into the company's own environmental indicators which can prevent the environmental impact (permissible emissions and discharges, from accidental deviation at any stage generation and disposal limits, air and water of the cycle; 130 Management of Capital and Performance

 bringing environmental information aimed at strengthening the position to the stakeholders; of the organization on the market.  achieving financial and operational benefits Reports on the environmental activities that could result from the introduction of JSC “SSC RIAR” are available on the official of environmentally relevant decisions website: http://niiar.ru/annual_report. Total Environmental Protection Expenditures and Investments

JSC “SSC RIAR” carries out the environmental and sustainable use of water resources, waste protection activities with the aim to decrease water collection and treatment, waste and prevent negative environmental impact management, rehabilitation of lands and surface and make the most efficient use of natural water, and provision of radiation safety resources. In 2016, the environmental protection of the environment (Fig. 4.6.1). activities were focused on air protection, protection EN31

Fig. 4.6.1. Total expenditures by purpose of environmental activities, mln RUB JSC “SSC RIAR” Annual Report 2016 131

Waste Generation As a result of RIAR production The waste is mostly low-hazardous (class IV) and economic activities, nearly 50 types and virtually non-hazardous (Class V) waste. of production and consumption waste (Table 4.6.2). generated are Class I-V waste (Table 4.6.1). Table 4.6.1 Dynamics of Production and Consumption Waste Generation

Amount of waste generated per year, t Reduction of waste amount, Waste hazard classes t (%) 2014 2015 2016

I 0,630 1,048 2,312 –1,264 (120,61)

II 15,762 0,000 0,037 –0,037 (100)

III 6,600 4,850 1,255 3,595 (74,12)

IV 96,457 112,044 38,847 73,197 (65,33)

V 450,733 466,450 257,672 208,778 (44,76)

Total 570,182 584,392 300,123 284,269 (48,64)

Waste to be disposed, decontaminated Register of Waste Disposal Facilities. Delivery or emplaced is sent to the organizations that of waste to be handed over to special-purpose hold a license to conduct waste management organizations is made using transport facilities activities. The waste is emplaced at special- of the organizations licensed to conduct purpose facilities entered into the State waste transport activities.

Table 4.6.2 Waste Amounts by Hazard Classes and Type of Management EN23

Waste amount by hazard classes, t Waste management methods I II III IV V Total

Transfer to other organizations for disposal 0 0 0 0 1114,0 1114,0

On-site incineration 0 0 0,35 0 0 0,35

Transfer to other organizations for decontamination 4,514 0,037 1,001 3,35 112,976 121,878 Transfer to other organizations for emplacement 0 0 0 5,497 144,696 150,193 at waste landfills On-site storage 0 0 0 0 1114,0 1114,0

On-site accumulation 1,497 0 0,004 43,0 0 44,501

RIAR has no imported, exported to the Basel Convention. Waste transported or reprocessed waste deemed hazardous between countries is also absent. EN25 under the terms of Annex I, II, III and VIII JSC “SSC RIAR” neither managers hazardous 132 Management of Capital and Performance

waste covered by the Basel Convention mass of waste transported per year (sent on the Control of Trans-boundary Movements for disposal and decontamination to other of Hazardous Waste and Their Disposal nor organizations) deemed hazardous under performs trans-boundary movements the terms of Annex I, II, III and VIII to the Basel of RIAR-owned hazardous waste. The total Convention makes up 4.387t (Table. 4.6.3).

Table 4.6.3 Mass of Waste Transported in the Region by Type and Groups

Waste Waste type Waste referring to Annex I to the Basel Convention mass, t

Spent accumulator alkali Y35. Basic compounds or solid base 0,037 Y8. Unnecessary mineral oils non-suitable Industrial mineral oil waste 1,0 for initially planned application Y9. Waste in the form of oil mixtures and emulsion (water), Water-based lubricating fluid 3,35 hydrocarbons (water) Mercury, mercury-quartz, luminescent lamps, high-pressure sodium lamps, Y29. Mercury, mercury compounds 4,515 mercury thermometers waste Industrial consumption waste similar to municipal Y46. Municipal waste 147,741 waste Waste being hazardous according to the RF Legislation Waste of class I–IV 1,197 that were not introduced into i.1-5 of the table

Consumed Materials

Information on the materials consumed, motor oils). The percentage of recycled indicating their mass, volume and quantity materials from the total number of all materials are presented in Table 4.6.4. The total mass used in production in 2016 is not significant. EN2 of materials representing reprocessed The share of purchased or used materials, or recycled waste used at JSC “SSC RIAR” the stability of which was certified by a third in 2016 made up 0,35 t (waste of mineral party, is 100 %. Table 4.6.4 EN1 Amount of Materials Consumed

Product type Indicator value Product type Indicator value

Rolled steel, t 43 Filter elements, pc. 234

Pipes, t 16 Industrial gases, m3 8 506

Protective means, pc. 139 279 Paper, sheet 2 250 000

Diesel fuel, t 163 Starting materials, g 3 932

Oil and lubricants, kg 41 571 Ion exchange resin imported, m3 8,2 Petrol, l 59 943

JSC “SSC RIAR” Annual Report 2016 133

Energy Consumption EN5 The power supply system in RIAR Table 4.6.5 includes production and consumption Total Fuel Consumption of energy sources produced by the RIAR from Non-renewable Sources facilities and purchased from third parties. The amount of electricity sold by JSC “SSC Fuel Energy, Fuel type RIAR” in 2016 was 127 862 thou. kWh, consumption, t GJ equivalent to 460 303 GJ. In the reporting Nuclear fuel 2,103 5 169 597 period, the numerical value of the energy Industrial fuel oil 181,95 7 capacity indicator is 1 960 GJ per person. Diesel fuel 172 7 When calculating this indicator, the account Petrol 64,387 3 was taken of the internal energy consumption: fuel, electricity, energy for heating, steam Total 420,44 5 169 614 as well as the total amount of full-time employees. JSC “SSC RIAR” does not Table 4.6.6 consume fuel from renewable sources Total Energy Consumption EN3 (Tables 4.6.5, 4.6.6). In comparison with the base period Energy amount, (2009), reductions in energy consumption were Energy type achieved thanks to such measures as conservation GJ of unused buildings and constructions, transi- Bought for consumption 289 122 tion to another heating system, change Own generation 581 640 in the temperature schedule and adjustment Sold to other organizations 460 303 of the heating network, and widespread From non-renewable sources 5 169 614 window replacement (Table 4.6.7). Total 6 500 679

Table 4.6.7 Consumption of Energy Resources EN6

Consumption of energy resources per years Costs for energy resources per years, k RUB Energy resource

2015 2016 2015 2016

Thermal energy, GJ 422 305 384 142 134 848,13 124 449,64 Electrical energy, GJ 477 000 461 272 268 561,96 259 577,19 Water, m3 5 352,88 4 629,54 30 481,14 29 944,43 Sewage water, m3 2 263,77 2 014,6 5 220,16 4 604,31 Total – – 439 111,39 418 575,57

The base period and target indicators in JSC “SSC RIAR”. Reductions in energy needs for reduction of energy consumption were for production of goods and provision of services adopted in accordance with the ROSATOM’s in JSC “SSC RIAR” are illustrated in Table 4.6.8. order. The RIAR’s program of energy saving Reductions in energy consumption versus and energy efficiency enhancement for 2013– the energy produced by the reactor facilities were 2017 envisages administrative and technical adjusted to the base period for which the year measures that are currently implemented 2013 was taken. 134 Management of Capital and Performance

Table 4.6.8 EN7 Reduction in Energy Consumption

Consumption per years, × 105 GJ Electric power 2013 2014 2015 2016 Produced 11,482 10,089 10,156 10,06837 Consumed 4,309 4,256 4,229 4,74973 Without losses 3,770 3,306 3,322 3,21129 Reduction in energy consumption, % – 0,1 0,3 2,8

Water Intake

and Waste Water Discharge

The JSC “SSC RIAR” water management from the surface-water body — the Cheremshan EN9 system implies multiple use of water Bay of the Kuibyshev Reservoir. The water intake in production. Volume of the reused water is and delivery of drinking water is done by “NIIAR 3 EN10 249.02 thou. m per year. Recycling water supply Generatsiya”, LLC (the wells are in lease). systems as closed cycles where water is added It should be noted that in 2016 intake water periodically to compensate evaporation losses volumes decreased by 16.25 per cent as are used for some types of production activities. compared to the similar indicator of the year Some operating procedures that need water 2015 (Table 4.6.9). To use the withdrawn natural cooling use a flow-through system as follows: water effectively and make up a water balance, surface-water body (water intake) — cooled RIAR has norms of water intake and discharge installation — surface-water body (water which determine water use norms per unit discharge). The recycling water supply systems of product expressed in money terms. and flow-through systems use service water Table 4.6.9 EN8 Water Intake

Water consumption 3 Water source Location by years, thou. m 2015 2016 Surface water used for technical water Cheremshan Bay of the Kuibyshev Reservoir 9 191,99 7 633,51 supply and cooling Subsoil plots along the banks of the Cheremshan Bay Underground water used for drinking, of the Kuibyshev Reservoir, managed 216,232 193,242 household and practical needs by “NIIAR–Generatsiya” Company from another water supply system Suburban command point “Fakel” (Flame) 0 2,04 Sewage from other organizations “NIIAR-Generatsiya” Company 610 562

Total 10 018,222 8 390,792

JSC “SSC RIAR” Annual Report 2016 135

Wastewater disposal of JSC “SSC RIAR” is Most water is discharged to the Cheremshan carried out by separate sewerage: industrial- Bay of the Kuibyshev Reservoir. The discharged storm, household and special (for waters water is untreated. Treated wastewater contaminated with radionuclides). Radwaste is discharged to the Erykla Stream. Before contaminated with radionuclides enter discharging to the Bolshoy Cheremshan River, the repository of the experimental under- wastewater is treated with biological methods. ground landfill for the isolation of liquid The monitoring data obtained by the Accredited radioactive waste (FSUE "National Operator Radiation Control Laboratory attached EN24 for Radioactive Waste Management"). to the Environmental Protection Office show The domestic wastewater is discharged the absence of radioactive contamination by the “NIIAR-Generatsiya” LLC to the municipal in wastewater discharged into the Cheremshan sewerage system and in 2016 amounted Bay of the Kuibyshev Reservoir. Tables 4.6.11 to 222,631 thousand m3. Discharge of sewage and 4.6.12 present data on the quality industrial storm water is carried out in the open and mass of polluting substances in water hydrographic network, which is part discharge. of the Volga River basin, through the output Table 4.6.10 wells. The overall volume of planned Overall Wastewater Discharge EN22 and unplanned discharge of water into surface water bodies in 2016 is shown in Table 4.6.10 Discharge volume, Receiving water body with the breakdown by destination. thou. m3 The hydrochemical index of water pollution is Cheremshan Bay 2 630,00 1.34 for the Cheremshan Bay of the Kuibyshev Stream Erykla 9,37 Reservoir and 1.25 for the Erykla stream River Bolshoy Cheremshan 1,83 which is indicative of water quality Class III Total 2 641,20 and classified as moderately polluted.

Table 4.6.11 Amount of Polluting Substances in Discharges, t

Location of discharge Polluting substance Cheremshan Bay Stream Erykla River Bolshoy Cheremshan * Organic compounds 11,4 481 0,0 076 0,0 043 Suspended substances 51,3 655 0,0 479 0,0 055 Dry residue 30,0 933 3,3 764 0,6 744 Ammonia ions 0,0 238 0,0 002 0,0 004 Chromium ions (III) 0,0 000 0,0 001 0,0 000 Chromium ions (VI) 0,0 000 0,0 000 0,0 000 Copper ions 0,0 032 0,0 000 0,0 000 Zink ions 0,0 000 0,0 001 0,0 000 Nitrate ions 0,0 258 0,0 058 0,0 126 Nitrite ions 0,0 000 0,0 000 0,0 001 Phosphate ions (by Р) 0,0 076 0,0 003 0,0 000 Chloride ions 31,4 552 0,3 748 0,0 247 Sulfates 5,2 867 0,4 106 0,1 510 Iron (total) 0,3 052 0,0 003 0,0 002 Chromium (total) 0,0 000 0,0 001 0,0 000 SAS 0,0 427 0,0 002 0,0 000 Oil products 0,0 329 0,0 012 0,0 001 Total 130,0 900 4,2 256 0,8 733 Grand total 135,1 889 136 Management of Capital and Performance

Table 4.6.12 EN22 Average Pollutant Concentration in Water Bodies

Place of control River Bolshoy Cheremshan Bay Stream Erykla Max acceptable Index Cheremshan concentration*, Back- Back- Back- mg/dm3 Control Control Control ground ground ground traverse traverse traverse traverse traverse traverse Concentration, mg/dm3 of: Background suspended substances 4,9 24,3 3,6 6,9 15,0 3,0 value + 0,75 dissolved oxygen 9,5 5,9 8,0 7,6 9,3 8,5 Более 4,0 dry residue 511 493 258 488 490 369 1 000,0 oil products 0,621 0,539 0,035 0,179 0,018 0,075 0,05 sulfates 102,0 87,0 Less than 50,0 59,0 69,0 83,0 100,0 SAS 0,007 0,023 0,021 0,036 0,008 Less than 0,01 0,50 iron (total) 0,147 0,260 0,39 0,045 0,206 0,09 0,100 chromium (total) Less than 0,01 Less than 0,01 Less than 0,01 0,018 Less than 0,01 Less than 0,01 – nitrate-ions 3,9 0,42 3,8 0,83 3,0 6,9 40,0 nitrite-ions 0,084 Less than 0,02 0,080 Less than 0,02 0,029 0,057 0,08 chloride-ions 17,7 29,2 Less than 10,0 54,0 11,1 14,0 300,0 phosphate-ions (by Р) 0,151 0,12 0,075 0,038 0,074 Less than 0,016 0,065 ions of: 0,48 0,39 0,33 0,033 0,18 0,20 0,5 ammonia cooper 0,0003 0,0015 0,001 0,005 0,001 0,004 0,001 zinc Less than 0,005 Less than 0,005 Less than 0,005 0,018 Less than 0,005 0,010 0,010 chromium (III) – – – 0,013 – – 0,07 chromium (VI) – – – 0,005 – – 0,03

3 Oxidability, mg О2/dm : permanganate 5,1 10,3 9,3 2,5 6,2 1,5 – dichromate 16,6 37,7 24,0 18,0 17,0 5,7 – Biochemical consumption of 3 oxygen , mg О2/dm : for 5 days 1,5 2,8 2,1 0,46 2,1 0,90 – for 20 days 3,4 7,6 4,4 1,10 4,1 2,4 3,0 pH index, 7,9 7,8 7,7 7,8 8,1 8,7 6,5–8,5 Water t, °С 10,0 20,9 12,8 27,9 16,1 20,0 –

*For water objects of commercial fishing importance.

The total area of RIAR land is 3 251.195 ha area where the Cheremshan State Ichthyologic of which 104.87 ha are owned, 1.67 ha are Reserve of the region importance is located. EN11 under lease, 3 144.65 ha are in use. All lands The total area of the Reserve is 2 902 ha. are located on the territory of the town It is of high conservation status and serves of Dimitrovgrad and Melekessky District, to protect fish stocks. The Reserve is located Ulyanovsk region. RIAR controls a water use in the north-east part of the Cheremshan Bay JSC “SSC RIAR” Annual Report 2016 137

waters of the Kuibyshev Reservoir in Melekessky Book of the Ulyanovsk region. The bird fauna EN26 District, Ulyanovsk region. The Reserve was created includes 183 species, of which 32 species are to preserve and recover commercial fish stock listed in the Red Book of the Ulyanovsk region in the Kuibyshev Reservoir. The coordinates of its and 13 species are included into the Russian Red EN14 center are: 49°51'3 E and 54°14'9 N. The results Book. Species included into the Red List of the long-term monitoring indicate that of the International Union for the Protection EN12 the impact of the RIAR’s discharges and wastewater of Nature were not found on the territory affected is insignificant and does not lead to the pollution by RIAR activities. Based on the experience of habitats and change of biodiversity. However, of the RIAR’s longstanding activity, it may be since wastewater is discharged directly to the water stated that there are no threats to the species’ body which is under protection at the regional level existence. The gamma-radiation exposition dose and breeding and feeding areas for fish stocks, from the ground surface is 4.644 nC/kgH the Reserve is still vulnerable. (18 µR/h). The specific activity of radionuclides The ichthyofauna of the Reserve includes in plants, water and soil is in accordance EN14 50 species, of which 23 species are of commercial with the sanitary standards. Water ecosystems value. Some representatives of the ichthyofauna are the Cheremshan Bay of the Kuibyshev are listed in the Red Book of the Ulyanovsk region. Reservoir, stream Erykla and river Sosnovka. The Cheremshan Bay fauna is also represented The list of fish inhabiting these pieces of water by 140 taxonomic groups of phytoplankton, includes 30 species, of which 2 species are listed 30 zooplankton species, 25 zoobenthos species. in the Red Book of the Ulyanovsk region. More than 360 species of higher vascular plants The invertebrate fauna is rather rich. One were found around the Institute within the impact of the largest groups of the invertebrate area, including 12 species listed in the Red Book animals is the insect group. The list of most of the Ulyanovsk region. The animal world includes widespread and frequent insects includes 400 species of vertebrate and invertebrate animals 207 species. Some species are listed in the Red inhabiting ground and water environment. Book of the Ulyanovsk region and two species The reptiles and amphibians fauna includes of butterflies are in the Red Book of Russia 16 species, of which 2 species are listed in the Red (Fig. 4.6.2).

a b c

Fig. 4.6.2. Species of butterflies listed in the Red Book of Russia: Polyxena (a), Mnemosyne (b), Apollo (c)

A significant impact on underground in the water use area meant for wastewater drinking waters could only be within the subsoil discharges. This area is a specially protected natural area leased by “NIIAR-Generatsiya” Company. territory of the regional significance ‘The State EN12 The greatest impact on biodiversity could be Ichthyologic Reserve “Cheremshanskiy”’. 138 Management of Capital and Performance

The amount of wastewater discharged As for the nesting sites of the white-tailed in this area during the year is 2 641.20 thou. m3. eagles (pine wood of the RIAR’s forest area The discharged water contains 135.19 t in the Cheremshan Bay bottom), the work of pollutants. should be done to either arrange a specially RIAR implements various measures protected area or perform protective measures to manage the biodiversity impact. to preserve the nests, for example, to stop EN13 The measures aim at removing the unauthorized woodcutting in this district. The RIAR’s biodiversity dumps, foresting, cleaning the protective sanitary management policy involves continuous zones of the Cheremshan Bay of the Kuibyshev monitoring of the environment and periodic Reservoir; other water bodies being included. assessments of the ecological risks and RIAR’s The plan is to purchase farm-grown juvenile impact on the environment. The ecological status fish to put it into the Bay, to introduce mechanical of flora and fauna habitats is satisfactory, sewage treatment and to lay up-to-date storm but the work on removing the unauthorized and wastewater drains to reduce the discharge dumps and foresting is needed. of the polluted wastewater into the Bay.

Emissions of Hazardous Substances into Atmosphere

The main greenhouse gases in the order decreased by 100 %. The changes are due of their estimated impact on the heat balance to the withdrawal of the CHP plant and the termi- of the Earth are water vapor, carbon dioxide, nation of the operation of the suburban boiler. methane, nitrous oxide and ozone. Contributing To reduce greenhouse gas emissions, it is necessary to the greenhouse effect are anthropogenic to reduce energy consumption, transportation, halogenated hydrocarbons and nitrogen oxides, uncontrolled leaks from refrigeration equipment perfluorocarbons, hydrofluorocarbon, sulfur and air conditioners, eliminate carbon tetrachloride hexafluoride and freon. The release of water from the processes of physical and chemical vapor, which is formed in the cooling towers processing of nuclear fuel. of the Institute's nuclear facilities, is about The location of the Institute in the settled 600 thousand m3. Emissions of freon-12 do not land allows implementing rational methods

EN20 exceed 10 kg when servicing industrial of forest management and reforestation EN15 refrigeration units, and freon-22 — 50 kg. on a sustainable basis with a view to protecting Direct emissions of greenhouse gases and improving the quality of sinks and storage into the atmosphere are possible when burning of greenhouse gases. In 2016, there were no fuel oil and diesel fuel in boilers while generating salvo and emergency emissions of pollutants heat for their own needs. Emissions of nitric into the atmosphere. Average annual oxide (in terms of nitrogen dioxide) are indicator of cleaning of atmospheric emissions 1.298 t, carbon monoxide — 1.577 t. of the enterprise received at gas-cleaning EN16 Indirect greenhouse gas emissions are generated and dust-collecting installations, from polluting by the producer of electricity and heat substances made up 96 % (Table 4.6.13). EN17 by NIIAR-Generatsiya, LLC. Other indirect The quantitative determination of emissions is greenhouse gas emissions originate from sources based on calculation methods using specific under the management of JSC "Alliances- indicators and the balance method. Emissions transatom", which carries out transportation of methane and nitric oxide, potentially arising EN19 of employees and cargoes. The volume of carbon from stationary combustion of fuel, were not taken dioxide emissions in 2016 compared to 2015 into account. JSC “SSC RIAR” Annual Report 2016 139

Table 4.6.13 Pollutant Emissions into Atmosphere EN21

Amount of emissions per years, t Substances Hazard class 2014 2015 2016 Gaseous and liquid: – 34,503 25,354 4,496 Incl.: Sulfur dioxide III 22,487 16,837 0,096 Carbon oxide IV 4,025 2,762 1,577

Nitrogen oxides (in N02 equivalent) III 3,257 2,526 1,298 Volatile organic compounds – 3,375 1,873 1,421 Others – – – 0,104 Solid: – 12,682 11,810 3,356 Incl. suspended substances III 0,042 0,013 3,356 Total – 47,185 37,164 7,852

Fines and Penalties EN29 for Breaching Environmental Legislation and Regulatory Requirements

In the reporting year, the fines and penalties from the total sum, discharge into water — 37 %, for the adverse environmental effect made up waste disposition — 41 %. JSC “SSC RIAR” does 496 k RUB (Table 4.6.14); the discharge of polluting not dispose waste into underground horizons. substances into the atmosphere makes up 22 %

Table 4.6.14 Fees for Adverse Environmental Impact

Amount of fees per years, k RUB. Type of fees 2014 2015 2016 Fees for allowable emissions (discharges) of pollutants and emplacement of production and consumption waste: 129,0 138 104 To water bodies 3,0 8 8 To air 6,0 2 – For emplacement of waste 120,0 128 96 Fees for excess emissions (discharges) of pollutants and emplacement 248,0 266 365 of production and consumption waste: To water bodies 120,0 165 165 To air 127,0 94 103 For emplacement of waste 1,0 7 97 Total 377,0 404 469 including: To water bodies 123,0 173,0 173 To air 133,0 96,0 103 For emplacement of waste 121,0 135,0 193 140 Management of Capital and Performance

In 2016, JSC “SSC RIAR” was only once fines for violation of environmental legislation brought to administrative responsibility were twice imposed on officials of the organization for violating the requirements to the protection in the amount of 6 thousand rubles. There were of a water body established by the Russian no non-financial sanctions imposed on JSC Federation water legislation, imposing “SSC RIAR” for not observing environmental an administrative fine on a legal entity legislation and regulatory requirements in the amount of 10,000 rubles. Administrative in 2016.

4.7. Occupational Health and Safety

Over the past few years JSC "SSC RIAR" increase labor productivity, motivation has recorded a reduction in occupational and attractiveness of labor. injuries: in 2012 there were five accidents The Institute also developed its own plan related to production, in 2013 and 2014 — of measures to prevent injuries of personnel for one accident categorized as light, and since during construction and assembly works 2015 there have been no accidents. Since 2002, in subdivisions and on the territory of JSC there have been no fatal accidents. In 2016, "SSC RIAR". Presented in Table 4.7.1, the data no accidents and cases of occupational characterize positively the efficiency diseases were registered for the representatives of the enterprise's activity in ensuring healthy of contractor and subcontractor organizations and safe working conditions and preventing performing work at the sites of JSC "SSC RIAR". occupational injuries at the enterprise. At present, JSC "SSC RIAR" has adopted In 2016, 177 people received training a comprehensive plan of measures to prevent in OS&H, counseling, prevention and control personnel injuries during construction of the risk of occupational injuries; 113.3 thousand and installation works at the ROSATOM’s rubles were spent on training. facilities, of which requirements apply to all The Institute pays great attention to health enterprises of the corporation. The objectives and safety issues which are reflected in both of implementing a comprehensive plan the Industry-Specific Agreement on Nuclear, of measures are to ensure a high level Energy, Industry and Science for 2015–2017 of production culture; minimize the incidence (http://www.pub.niiar.ru/system/files/sites/sogla of occupational injuries and occupational shenie_2015-2017.pdf), and in JSC "SSC RIAR" diseases; preserve the health of workers; CBA for 2014–2017 (http://niiar.ru/sites/default/ files/pgo2014_ln_29062015_c_ssylkami_0.pdf).

Based on the results of the regional phase of the All-Russian Competition “Russian Organization of High Social Efficiency”, JSC “SSC RIAR” became the winner in the category “For Hampering Industrial Injuries and Occupational Illness in the Production Companies“

JSC “SSC RIAR” Annual Report 2016 141

Table 4.7.1

Occupational Injury Data LA6

Injury rate for organizations by years

Injury rate JSC “SSC RIAR” Contractor’s Organizations

2014 2015 2016 2014 2015 2016

Occupational injury rate 0,027 0 0 0 0 0

Professional disease rate 0 0 0 0 0 0

Lost days rate 0,99 0 0 0 0 0

Absence rate 7,42 0 0 0 0 0

Employees’ Health Controls

Annually JSC “SSC RIAR” employees activities in JSC “SSC RIAR” were implemented go through periodic medical examinations. in compliance with the Industry Agreement LA8 Medical examinations are performed strictly on Nuclear Power, Industry and Science for 2015– in compliance with the Order of the Ministry 2017 and Collective Bargaining Agreement of Healthcare and Social Development of the enterprise. of the Russian Federation # 302n of 12 April In accordance with the system 2011 “On approval of the lists of harmful of the three-stage administrative-public control, and / or hazardous occupational factors schedules of activities to control the state and works which require mandatory pre-work of occupational safety at the enterprise were and periodic medical examinations developed: and the procedure for conducting mandatory  checks to examine compliance with the health, pre-work and periodic medical examinations radiation, industrial and fire safety of the workers engaged in heavy work requirements; and work in harmful and / or dangerous labor conditions”. In 2016, 2 611 RIAR employees who  meetings with representatives of the RIAR worked in contact with harmful and / or dangerous divisions as a result of the above checks; substances and occupational factors underwent  inspections by occupational health medical examinations. Occupational safety and safety specialists.

Personnel’s Exposure Control

In the reporting period, the average (http://niiar.ru/sites/default/files/pgo2014_ln_2906 annual effective dose of the personnel is 2015_c_ssylkami_0.pdf). 2.78 mSv. In the year 2015, it was 2.55 mSv In 2016 there is an increase in the average The effective dose dynamics starting effective dose of the personnel, which is from 2001 is presented in the JSC "SSC RIAR” explained by the reduction in its number while annual report for the year 2015 maintaining the volume of radiation hazardous 142 Management of Capital and Performance

work (collective dose of personnel exposure). In 2016, as part of the implementation No cases of exceeding the basic dose limit of the program to reduce the doses of RIAR for personnel established by NRB-99/2009 personnel, radiation shielding mats have been and equal to 20 mSv were recorded among purchased and used for radiation hazardous the Institute's employees in 2016: 48 % work, which allows reducing the impact of ionizing of the staff in Group A received an effective radiation on personnel in the work sites. dose of less than 1 mSv, 16 % — an effective dose in the range from 1 to 2 mSv, 19 % — from 2 to 5 mSv, 17 % — from 5 to 20 mSv, which is consistent with the similar indicators for the industry as a whole. Based on the results of the individual dosimetric control of the personnel (Fig. 4.7.1), an individual life risk was calculated using the program complex ARMIR-5 related to occupational exposure of personnel. The absolute majority of workers (99.16 %) is in the radiation risk zone less than 10–3. Individual lifelong risk increased in comparison with the value established in NRB-99/2009 is observed only in 18 employees (0.84 %). In 2016, a specialized medical examination of these employees was organized, Fig. 4.7.1. Number of JSC “SSC RIAR” employees the results of which showed that these under the individual dosimetric control employees had no radiation-induced diseases.

Enhanced Safety and Efficiency of the Reactor Facilities

Reliability and safety of the RIAR reactor of the physical ageing of the equipment, operation is provided by implementing but also because of the new requirements special-purpose measures which include of the Federal Norms and Regulations in the field modernization of the RIAR process equipment of safe operation of the facilities related to the use and compliance with valid standards of atomic energy. In 2016, the following activities of production processes during nuclear reactor were done: operation. For that purpose we systematically  systems to transport containers with nuclear monitor the state of the nuclear facilities materials, radioactive substances and radwaste and take into account all the changes were brought into compliance with the federal of the current Russian Legislation. The operation norms and regulations; of JSC “SSC RIAR” reactors was accident-free in 2016. The information regarding the risks  backup diesel generators were installed related to nuclear and radiation safety is given in the radwaste storage facility; in Section 3.6 “Risk Management”. The project  to support safe operation of the nuclear “Enhanced Safety and Efficiency of JSC "SSC facilities, the following items have been RIAR" Reactor Facilities” ensures continuous purchased: modernization of the RIAR reactor facilities  beryllium items for the SM and MIR reactor which retrofits are needed not only because cores; JSC “SSC RIAR” Annual Report 2016 143

 units for the ventilation center to collect  to replace obsolete safety system equipment ; and discharge into the atmosphere gaseous waste;  to replace electrical equipment and repair the converter at the electrical sub-station;  equipment to upgrade the cryogen facility;  safety-related measurement systems;  to confirm the accreditation criteria  portable radiation monitors; of the radiation and chemical control laboratory  portal monitor. of the environmental protection office and equip the points of control over The implementation of the project the micro-biological parameters, acute hazard allowed the level of nuclear, radiation and fire and chronic hazard to the aquatic environment safety of the nuclear research facilities to be within the JSC “SSC RIAR” area; improved; the engineering processes to be updated and measuring tools to be renewed.  to buildup the VK-50 reactor vessel sealing ring;

Plans for 2017:  to purchase:  three Be blocks for the MIR reactor;  to upgrade:  rotary-type pump for the VK-50 cooling  RBT-10/2 control and safety system; system;  cryogen facility;  compressed air equipment;  ventilation, water supply and heating system  reference ionizing sources; of the solid radwaste storage facility;  emergency alarm equipment.

Minimized Environmental Impact

To minimize the environmental risks be found in Section 4.6 “Natural Capital” resulted from the RIAR activities, the Environmental of Chapter 4. Policy was brought into force. More details can

144 Stakeholder Engagement

Publi Годовой отчёт АО «ГНЦ НИИАР» 2016 145 146 Stakeholder Engagement

5.1. Public Reporting System

RIAR has set forth its public stance on all 2015 (http://www.niiar.ru/?q=annual_report) activity aspects to provide a high level of openness on the official RIAR website. During these years and transparency of its activities to stakeholders. a public reporting system has been developed For more details see Public Reports 2011– (Fig. 5.1.1) and is still being enhanced.

Fig. 5.1.1. Schematic representation of the public reporting system

Functioning of the public reporting reports is documented in the KPI maps system is generally provided by the Committee of all division heads. More than sixty RIAR for Public Reporting Activities, Division professionals are involved in the Report for Science and Engineering Research development including those who are under the Department for R&D Management responsible for source data release. For more and International Activities, and PR Office. detailed information about the activities The responsibility for drafting annual public and involvement of the Committee for Public JSC “SSC RIAR” Annual Report 2016 147

Reporting Activities, Stakeholder Commission period and near-term plans in enhancing and authorized RIAR subdivisions the public reporting system. in the public reporting system development please refer to Annual Report 2014 (http://niiar.ru/sites/default/files/pgo2014_ln_ Regulatory system 29062015_c_ssylkami_0.pdf). In the course of public reporting of Report drafting a great deal of work has been done both by RIAR 1. Provision on the Stakeholder Commission professionals and stakeholder representatives. in Public Reporting of JSC “SSC RIAR”. The members of the Committee for Public 2. Provision on the Committee for Public Reporting Activities express their gratitude Annual Reporting of JSC “SSC RIAR”. to those who have shown their interest 3. Standard of Enterprise STO 086-202-2016 in RIAR activities and read the Report. RIAR “Integrated Management System communicates effectively with all stakeholders of JSC “SSC RIAR”. Integrated Annual Report by providing in time important information Drafting Procedure.” about all activity aspects and responding to stakeholders’ requests and wishes.

Table 5.1.1 presents the results of the reporting

Table 5.1.1 Enhancement of the public reporting system

Trend 2016 results

 Corporate documents in public reporting have been updated taking into account new international and corporate standards.  The Provision on the Committee for Public Reporting Activities has been approved (Committee membership, members’ objectives and responsibilities have been updated and broadened; functions have been clarified).  The revised Provision on the Stakeholder Commission in Public Reporting of JSC “SSC RIAR” has been approved.  An Order on activities for drafting JSC “SSC RIAR” Annual Report 2016 has been issued. It has been approved the Report concept for the reporting year, work plan, schedule, and terms of reference to provide information for the Report.

 Company standard STO 086-202-2016 “Integrated Management System of JSC “SSC RIAR”. Annual Report Drafting Procedure” has been updated and approved.  A work plan for the development of the public reporting system for 2016–2017 has been developed and approved.  An Order on approval of the updated (broadened) Stakeholder Commission membership and schedule of activities involving stakeholders for 2016 has been issued.  Activities to develop a system for information collection and treatment were carried out in order to file reporting data in accordance with the international integrated reporting standards

Enhancement of the regulatory and methodology system system methodology and Enhancement of the regulatory

 Best practices of Russian and foreign annual reports have been analyzed; analytical reports

of the Russian regional network in public reporting have been used in report drafting.  RIAR has taken part in public reporting consultative workshops arranged by different ROSATOM’s organizations involving other organizations’ representatives engaged in public reports drafting, promotion and assessment Advanced Advanced course training staff for the

148 Stakeholder Engagement

Table 5.1 (continued)

Trend 2016 results

 Switch to basic GRI G4 Sustainability Reporting Guidelines.  Conducted dialogue with stakeholder representatives on the Report key topics “in praesentia”  Increased involvement rate of the stakeholder representatives in drafting the Report.

 Improved utility of the information presented in the Report.  Applied new reporting formats (short presentations of Russian and English Report versions).  Switch to earlier start of the reporting campaign (August — October) Report drafting Report

 The Report has been used as a reference and analytical information source for the stakeholders.  A range of stakeholders including foreign stakeholders has been broadened in the course of the questionnaire surveys (to identify significant aspects of RIAR activities) and the Report promotion.  Long-term partnerships have been established with major stakeholders.  The rate of stakeholder Commission involvement in Report drafting activities has been increased.  A list of major stakeholder groups has been updated Broadening the range of range of the Broadening stakeholders involved drafting in Report

 Survey has been conducted among stakeholders to identify significant aspects of RIAR activities as well as reciprocal influences between RIAR and stakeholders.  Questionnaire has been distributed among top managers to identify significant aspects of RIAR activities as well as reciprocal influences between RIAR and stakeholders.

 Surveys on utility and quality of the information contained in the Report have been conducted among the staff, top managers, and external stakeholders including international partners.  Questionnaires and surveys on updating the Report priority topics have been carried out.  Surveys have been conducted among the RIAR staff to identify the Report readability index.  Questionnaires to identify stakeholders’ expectations and wishes have been conducted Surveys and questionnaires questionnaires and Surveys

 Methods of Report short and full versions promotion among stakeholder main groups (publication of information at RIAR’s official website (http://www.niiar.ru/annual_report), addressed mailing, distribution at scientific conferences, exhibitions, meetings with business partners, etc.) have been improved.  Report-related information has been distributed through mass media.  RIAR and its Annual Report has been participated in Russian public reporting contests: o Industry rating of Annual Reports :  The winner in the category Best Annual Public Report of ROSATOM Division Organizations;  Took the fourth place in the overall rating;  Took the fourth place in the category Public Reporting and Stakeholder Engagement Efficiency;  Took the fourth place in the category Quality of Russian Language Use and Effective Text Design in the Annual Report; o Survey of Corporate Transparency of the Major Russian Companies 2016  Took the tenth place, transparency level I, information disclosure index А (84.88 points) Promotion Promotion

JSC “SSC RIAR” Annual Report 2016 149

5.2. Engagement in Report Drafting

The system of engagement with every engagement, particularly in view of social group of stakeholders has and will have a great aspects and reputation. The major groups influence on RIAR development. Therefore, of stakeholders and their interests are provided taking into consideration their interests in Annual Report 2014 (http://niiar.ru/ in strategic planning is highly important sites/default/files/pgo2014_ln_29062015_c_ssylk G4-24 in terms of sustainable development. ami_0.pdf). In the reporting year a ranking G4-45 The development of stakeholder engagement map was updated based on the survey forms and methods, analysis and consideration conducted among top and senior managers of their requests enable timely feedback of JSC “SSC RIAR”, and representatives to any possible risk related to stakeholder of the major groups of stakeholders (Fig. 5.2.1).

Fig. 5.2.1. Ranking map of RIAR’s stakeholders

The analysis of a change in the reciprocal of Capital and Performance). Compared influence between the stakeholders and RIAR to the previous years, a growing impact of RIAR conducted in the course of three last years on several groups of stakeholders such of integrated reports drafting (Fig. 5.2.2) as population, mass media, scientific has confirmed that the partners, including and educational institutions and public international partners, have a great influence organizations is observed. This is resulted on the directions of RIAR’s activities (see from improved transparency, openness Chapter 2 Strategy and Chapter 4 Management and public acceptance of RIAR activities. 150 Stakeholder Engagement

Fig. 5.2.2. Reciprocal influence between the stakeholders and JSC “SSC RIAR”

Stakeholder engagement activities in Report drafting

The stakeholders were involved in all as well as ask questions. In the course of Report milestones of Annual Report 2016 drafting drafting in accordance with the АА1000SES from shaping its concept to discussions Stakeholder Engagement Standard of the final draft. They had an opportunity the following activities were arranged to give their requests and recommendations JSC “SSC RIAR” Annual Report 2016 151

involving the representatives of all groups  Dialogue in Report drafting of stakeholders: (25 participants);  Surveys:  Public consultations on the Report  to investigate the reciprocal influence draft (in absentia, 16 participants). between the stakeholders and JSC “SSC RIAR”, RIAR regularly informs its target audiences about all important events related  to identify significant aspects of RIAR to its primary activities via RIAR’s local activities, and official websites, press releases  to assess the Report with respect to mass media, articles, and interviews to criteria (Fig. 5.2.3); with the management of RIAR in nuclear  Discussion of the Report concept (in absentia, industry editions. 21 participants);

Fig. 5.2.3. Assessment of JSC “SSC RIAR” Report with respect to criteria

Concept of Annual Report 2016

During the reporting year RIAR continued Aspects of Activity”) and a ranking map that discussions of the Annual Report concept reflects the interrelationship between in absentia. The members of the Committee stakeholders and RIAR, and take into account for Public Reporting Activities and Stakeholder wishes related to Report drafting and public Commission participated in these discussions. reporting system enhancement of those The Report concept was introduced who were polled. The discussants voiced to the participants based on questionnaire their recommendations that contributed surveys conducted among the external to specify and finalize the Report concept. and internal stakeholders. The results The concept was approved by RIAR order issued of these questionnaires were used to compile on December 23, 2016. a relevance matrix (see Section 2.4 “Relevant 152 Stakeholder Engagement

Dialogue with stakeholders

The dialogue to discuss socially of the enterprise, focusing on the important important aspects of RIAR activity and to reflect stages of the financial rehabilitation program these aspects in the drafted Report was held and topics that reflect most fully the research, on April 4, 2016 (Fig. 5.2.4) at the Slavsky production and human resources related Conference Center, Dimitrovgrad. activities of RIAR in the reporting year. The attendees of the dialogue were as follows: He covered fully one of the Report priority Dimitrovgrad and Ulyanovsk authorities, topics “Optimization of business processes JSC “Science and Innovation” representatives, and efficiency improvement”. During the discussion RIAR employees and trade union, representatives of these reports, the RIAR top management of scientific and educational institutions, presented information on the social population, public organizations, and mass and ecological policy of the institute following media. The following presentations were made the results of the reporting year and plans during the meeting: “JSC “SSC RIAR” for the future. The members of the public Performance in 2016 and Development Plans” highly appreciated the quality of the presented (Speaker: Alexander Tuzov, Director of JSC information and the level of the event “SSC RIAR”), “Research activities in JSC organization. In addition, they voiced “SSC RIAR”. Current State and Perspectives” several recommendations to disclose (Speaker: Elena Zvir, Head of Reactor Materials particular information in the Annual Report Testing Complex). In his presentation, the RIAR and suggestions to enhance public reporting Director told about key works and achievements system and stakeholder engagement.

Fig. 5.2.4. Attendees of the dialogue with stakeholders

Public consultations on the Report draft

The Report draft was distributed on April 21, There were no comments or proposals related 2017 among the stakeholder representatives to the Report contents. for them to introduce their proposals.

Inclusion of stakeholders’ proposals

In the course of the dialogue and international conferences, Universities) and Annual Report 2016 drafting (surveys seven proposals and recommendations have and questionnaires, presentations for target been voiced (Table 5.2.1). audience at the exhibitions, Russian JSC “SSC RIAR” Annual Report 2016 153

Table 5.2.1 Requests and proposals on information disclosure voiced by stakeholders G4-27

Requests / proposals Implementation

To disclose information about progress of Multipurpose Fast Research Reactor and Polyfunctional The information is provided in Section 4.2 Intellectual Capital Radiochemical Research Complex construction

The information is provided in Section 3.12 Public Position To provide more information about RIAR contribution as to Sustainable Development and partially in economic growth of the company habitat in Section 4.5 Human Capital

To explain the reasons of staff reduction The information is provided in Section 4.5 Human Capital

Partially completed. A list of foreign stakeholders has been created, their ranking has been carried out, and pilot mechanisms for cooperation are being developed. To involve the representatives of foreign stakeholders When preparing the Report 2017, it is planned to involve in report drafting a number of foreign stakeholders to investigate the major foreign companies best practices related to the stakeholder engagement

The information is provided in Sections: To provide more detailed information about the results 4.1 Financial Capital, 4.2 Intellectual Capital, of research and production activities of the Institute 4.3 Output, 4.4 International Activities

To clarify the role of the public reporting system The information is provided in Chapter 5 Stakeholder Engagement of JSC “SSC RIAR” in issuing the Annual Report

The information is provided To provide more information about stakeholder engage- in Chapter 5 Stakeholder Engagement, ment taking into account questionnaires analysis Section 3.12 Public Position as to Sustainable Development and Chapter 4.5 Human Capital

5.3. Public Assurance Statement

The management of JSC “SSC RIAR” concept (in absentia), dialogue with stakeholders offered us to verify integrated Annual (in Dimitrovgrad on April 4, 2017) Report 2016 in terms of completeness and public consultations on the Report draft and materiality of the disclosed information during November 2016 — April 2017, related to the most important issues and freely express our opinion for the stakeholders. In doing so, we and our on the issues under discussion. We also took representatives were given an opportunity part in identifying important aspects / topics to participate in discussions of the Report to be disclosed in the Report. Our statement 154 Stakeholder Engagement

is based on a comparative analysis of two the data acquisition and analysis system, Report revisions: Report draft and Report final nor did we study in a special way the data revision, as well as comments made and management processes. The reliability by RIAR managers and employees during of the actual data presented in the Report the dialogue and assurance statement was not as well the subject of public assurance. as well as provided information based All the undersigned persons had all opportunities on the results of the activities performed to freely express their opinion, and did not (dialogues protocols, the table containing receive from RIAR any reward for participation stakeholders’ proposals). During this assurance in the Report assurance procedure. procedure we were not focused on checking

Assessments, comments and recommendations

We share a common positive attitude standards as well as ROSATOM’s to Annual Report 2016, its format and scope unified policy in public reporting. We have a of the information provided. RIAR has prepared positive attitude towards the RIAR’s management an informative and well-arranged document decision to continue issuing annual reports that meets our expectations. It is particularly in Russian and in English as well as in a short important that the Report has been (presentation) version. It was highlighted that issued on a voluntary basis, and is a good in contrast to public reports issued by different illustration of a transparency and openness ROSATOM’s enterprises, the Annual Report principle of RIAR policy, thus showing of JSC “SSC RIAR” is an official publication: both a high level of information disclosure it was assigned an ISBN and UDC; and willingness to conduct an open dialogue the information presented in the Report was with the stakeholders on different issues related edited, thus ensuring high quality of published to multiple activities including safe operation information and fulfillment of all editing of research reactors and other facilities. standards. We consider that due to more detailed study We believe that the information has of RIAR business model, the Report could clearly been disclosed sufficiently both in terms reflect a complicated value chain, control system, of taking into consideration the recommendations management strategic objectives and approaches. made by the stakeholders during the Report A full picture of RIAR activities including socially drafting activities. In our opinion, it is important activity aspects, social, ecological an integrated Report that should present and economic impact factors, challenges and mid- an official viewpoint of RIAR’s management and long-term plans is presented to the Report on all key issues and activities. readers. The following conclusions can be drawn The Report has an indisputable advantage from our analysis. that lies in applying Russian and international

Materiality of the information

We believe that RIAR has taken to identify materiality of the information. into consideration international standards After conducting a questionnaire survey JSC “SSC RIAR” Annual Report 2016 155

among top managers and Stakeholder related to the priority topic have been Commission members, and identifying disclosed. The most important information the material aspects of its activity, RIAR has to understand the prospects of RIAR fully and comprehensively disclosed the relevant development is provided in the Report information in the Report. The Report provides sections on RIAR strategic development, the information important both for RIAR its unique competitive advantages and growth and its stakeholders. We consider the priority prospects; enhancement of finance, risk topics of the Report “Optimization of business and staff management efficiency; economic, processes and efficiency improvement” social and environmental impact; and safety and “RIAR: sixty years in nuclear industry” assurance in multiple projects. We are not have been rightly chosen because they have aware of any other issues important been attracted the most stakeholders’ interest for stakeholders to be included in the Report. in the reporting year. All material aspects

Completeness of the information

In our viewpoint, the information related and gives an opportunity to show a complete to the key aspects and provided picture of RIAR activities. References in the Report is complete and allows the readers to other information sources enable obtaining to draw the conclusions on RIAR performance. all the necessary data. At the same time, We believe that the reduced Report scope they do not unduly burden the Report in disclosing all material aspects complies with extra data presented both on RIAR’s official with best international reporting practices website and in recent annual reports.

Response to requests, offers and recommendations of the stakeholders

We believe that RIAR has shown major additional information in the final revision progress in arranging stakeholder engagement of the Report, or it has explained the reasons and establishing the public reporting why the requested information can’t be disclosed system. We consider it a good tradition that (see the present chapter of the Report). the stakeholders become engaged at the stage In Report drafting RIAR has shown its of concept development before Report readiness to provide a constructive drafting. The stakeholders had an opportunity response to the stakeholders’ requirements to voice their proposals and recommendations and proposals. We hope that RIAR will continue on information disclosure and public reporting implementing the principles of good corporate system development. Upon the stakeholders’ conduct by developing the public reporting request RIAR has updated and provided system and stakeholder engagement. 156 Stakeholder Engagement

Annual Report 2016 assurance statement G4-33 approvals page

Deputy Director General — Vyacheslav Director of the Block for Innovation Management, Pershukov Rosatom, State Atomic Energy Corporation

Director General Sergey Science and Innovations, JSC Kashlev

Director Alexander SSC RIAR, JSC Tuzov

Chief Engineer Andrey SSC RIAR, JSC Vorobey

Deputy Director for Economics and Finance Igor SSC RIAR, JSC Knyazkin

Deputy Director for Staff Management Yulia and Social Development SSC RIAR, JSC Titova

Head of Department for R&D Management Alexey TVEL, JSC Dolgov

Sergey Governor of Ulyanovsk region Morozov

Vyacheslav Head of Municipal Administration of Dimitrovgrad Gnutov JSC “SSC RIAR” Annual Report 2016 157

Director Center for Development of Nuclear Innovative Albert Cluster of Dimitrovgrad, Ulyanovsk region, Gataullin independent noncommercial organization

Trade Union Chairperson Igor SSC RIAR, JSC Kungurtsev

Rector Ivan Dimitrovgrad Engineering and Technological Institute, Sagan Branch of NRNU “MEPhI” in Dimitrovgrad

Deputy Head for Research Management Vladimir Ulyanovsk State University, Plottsev Director of USU — RIAR Consortium

Chairperson Alexander Organization of Veterans of War Voronin and Labor in Dimitrovgrad

Head, Editor-in-Chief Dmitrii Dimitrovgrad Panorama newspaper Shikov

Editor, Economics Unit Svetlana Dimitrovgrad Panorama newspaper Knyaginina 158 List of abbreviations

LIST OF ABBREVIATIONS

AA1000 — AccountAbility of semi-finished rolled products Principles Standard. (sheets, rods, ribbons), tube work pieces, AA1000 APS — AccountAbility tubes and forgings designed Principles Standard. for manufacturing pieces and units of power engineering equipment. AA1000 AS — Assurance Standard. EP823-Sh (16Kh12MVSFBR-Sh) AA1000 SES — Stakeholder Engagement (ЭП823-Ш (16Х12МВСФБР-ш)) — Standard. heat-resistant high-alloy steel applied to manufacture extra thin-wall tubes, AE — an absorber element. rods with special surface finish, special purpose equipment pieces. ARBUS — an arctic reactor unit-type facility. FA — a fuel assembly. BN — a fast sodium-cooled reactor. FA-2 — a fuel assembly with a rigid frame BOR-60 — a fast research reactor (60 MW). made of twelve spacer grids welded BREST OD-300 — an inherently safe fast on guide tubes. reactor (300 MW). FA-2M — FA-2 upgraded version containing CIAE — China Institute of Atomic Energy. shortened end pieces, extended core fuel column, enhanced spacer grids to reduce CIS — the Commonwealth hydrodynamic resistance (the thirteenth of Independent States. grid in the bottom fixes the beam in the hydrodynamic instability area); CJSC — Closed Joint Stock Company. it is intended for eighteen-month fuel cycle. CJSC “EMI” — Closed Joint Stock Company “Energomontage International”. FAA — a fuel assembly of an alternative design with a rigid skeleton formed by six corners CJSC “YuKOS EP” — Closed Joint Stock and spacer grids. It has an increased Company “YuKOS Exploration & Production”. fuel burn-up, improved operational reliability and enhanced bending stiffness. E110 (Э110) — an alloy based on a mixture “FBK”, LLC — Limited Liability Company of electrolytic and iodide zirconium. “Financial and Accounting Consultants”.

EBITDA — Earnings before Interest, FE — a fuel element. Taxes, Depreciation and Amortization. FSUE ‘PA “Mayak”’ — Federal State EFA — an experimental fuel assembly. Unitary Enterprise ‘Production Association “Mayak”’. EP302-Sh (ЭП302-Ш ) — chromium-nickel austenitic steel applied for production FSUE — Federal State Unitary Enterprise. JSC “SSC RIAR” Annual Report 2016 159

FSUE ‘NII NPO “Luch”’ — Federal State ISEA — Institute of Social and Ethical Unitary Enterprise ‘Research Institute — Accountability (AccountAbility). Research and Production Association “Luch”’. ISO — International Organization FSUE “NO RWM” — Federal State Unitary for Standardization. Enterprise “National Operator for Radioactive Waste Management”. ITER — an international thermonuclear experimental reactor. FSUE “RFNC — VNIIEF” — Federal State Unitary Enterprise “Russian Federal Nuclear ITsKM “Prometey–Atom”, LLC — Limited Center — All-Russian Research Institute Liability Company ‘Design Center of Experimental Physics”. for Structural Materials “Prometey–Atom”’. FSUE CRISM “Prometey” — Federal State Unitary Enterprise ‘Academician I.V. Gorynin JSC — Joint Stock Company. Central Research Institute of Structural Materials “Prometey”’. JSC ‘OKB “Gidropress”’ — Joint Stock Company ‘Experimental and Design GMP — Good Manufacturing Practice. Organization “Gidropress”’.

GOST — a set of state standards JSC ‘SPA “TsNIITMASh”’ — Joint Stock of the Russian Federation. Company ‘Scientific Production Association “Central Research Institute GOST RV — a set of state military standards for Machine Building”’. of the Russian Federation. JSC ‘SPb “IZOTOP”’ — Joint Stock Company GRI — Global Reporting Initiative. ‘Saint Petersburg “IZOTOP”’.

GT–MHR — gas turbine — modular JSC “Afrikantov OKBM” — Joint Stock helium reactor. Company “Afrikantov Experimental Design Bureau for Mechanical Engineering”. HTGR — a high temperature gas-cooled reactor. JSC “Atomenergoprom” — Joint Stock Company “Atomic Energy Power IAEA — International Atomic Energy Agency. Corporation”.

ICERR — IAEA International CEntre based JSC “Atomproekt” — Joint Stock Company on Research Reactor. ‘Research and Design Institute of Power Engineering Technology IIRC —International Integrated “Atomproekt”’. Reporting Council. JSC “DEZ” — Joint Stock Company INES — International Nuclear Event Scale. “Consolidated NPP Equipment Procurement Directorate”. International Framework — International Standard Integrated Reporting JSC “FC NRS” — Joint Stock Company “Federal Center for Nuclear ISBN — International Standard and Radiation Safety”. Book Number. 160 List of abbreviations

JSC “Greenatom” — Joint Stock JSC “SNIIP” — Joint Stock Company Company “Greenatom”. “Specialized Research Institute for Instrumentation Engineering”. JSC “GSPI” — Joint Stock Company “State Specialized Design Institute”. JSC “SSC RF — IPPE” — Joint Stock Company “State Scientific Center of the Russian JSC “IRM” — Joint Stock Company Federation — Institute for Physics “Institute for Reactor Materials”. and Power Engineering named after A.I. Leypunsky”. JSC “Isotope” — Joint Stock Company “Isotope”. JSC “SSC RF TRINITI” — Joint Stock Company “State Scientific Center of the Russian JSC “L.Ya. Karpov NIFKhI” — Joint Stock Federation — Troitsk Institute for Innovation Company “L.Ya. Karpov Research Institute and Fusion Research”. of Physics and Chemistry”. JSC “SSC RIAR” —Joint Stock Company JSC “NIITFA” — Joint Stock Company “State Scientific Center — Research Institute “Research Institute for Applied Physics of Atomic Reactors”. and Automation”. JSC “TsKBM” — Joint Stock Company JSC “NIKIET” — Joint Stock Company “Central Design Bureau of Machine-Building”. “N.A. Dollezhal Research and Development Institute of Power Engineering”. JSC “TVEL” — Joint Stock Company “TVEL”.

JSC “NIKIMT–Atomstroy” — Joint Stock JSC “UEKhK” — Joint Stock Company Company ‘Research and Design Institute “Ural Electrochemical Combine”. for Assembly Technology “Atomstroy”’. JSC “VNIINM” — Joint Stock Company JSC “OTEK” — Joint Stock Company “A.A. Bochvar High-Technology Research “Integrated Thermal Power Company”. Institute for Inorganic Materials”.

JSC “PA Electrochemical Plant” — Joint Stock JSC “VNIKhT” — Joint Stock Company Company ‘Production Association “Leading Research Institute “Electrochemical Plant”’. for Chemical Technology”.

JSC “Radium Institute” — Joint Stock JSC FCS&HT “SNPO Eleron” — Joint Stock Company “V.G.Khlopin Radium Institute”. Company ‘Federal Center for Science and High-Technologies JSC “Rosenergoatom Concern” — “Special Scientific & Production Joint Stock Company “Concern Enterprise “Eleron”’. for Generation of Electric and Thermal Power at NPPs”. LLC — Limited Liability Company.

JSC “Science and Innovations” — LRW — liquid radioactive waste. Joint Stock Company “Science and Innovations”. LTIFR — Lost Time Injury Frequency Rates.

JSC “SKhK” — Joint Stock Company MBIR — a multi-purpose fast reactor. “Siberian Chemical Combine”. JSC “SSC RIAR” Annual Report 2016 161

‘MC “UES”’, LLC — Limited Liability PR — Public Relations. Company ‘Management Company “Uralenergostroy”’. PRC — the People’s Republic of China. MIR — a multi-loop research reactor for material testing. PUREX — Uranium and Plutonium Regeneration through EXtraction. MOX-fuel — mixed uranium plutonium oxide fuel. PUREX process — plutonium-uranium recovery by extraction; NK “Rosneft — Research and Engineering nuclear fuel recycling procedure. Center”, LLC — Limited Liability Company ‘Oil Company “Rosneft —Research R&D — Research and development. and Engineering Center”’. RBMK — a high-power channel-type reactor. NOPAT — Net Operating Profit after Tax. RBT — a pool-type reactor. NP-090-11 — Quality assurance program requirements for nuclear facilities. REMIX (regenerated mixture) — Russian innovative nuclear fuel for the VVER type NPP — a nuclear power plant. reactors; it is produced from a non-separated mix of regenerated uranium and plutonium NRB—99/2009 — Radiation safety norms. obtained when reprocessing spent nuclear fuel. NRC “Kurchatov Institute” — National Research Center “Kurchatov Institute”. RF — a reactor facility.

NRHF — a nuclear- and radiation-hazardous RF — the Russian Federation. facility. RIAR — Research Institute OGRN — primary state registration of Atomic Reactors. number. RITM — a modular integral reactor. OSPORB 99/2010 — Principal sanitary radiation safety rules. Rostechnadzor — Federal Environmental, Industrial and Nuclear Supervision Service OST — a set of industry-specific of Russia. standards. RW — radioactive waste. PJSC — Public Joint Stock Company. SFA — a spent fuel assembly. PJSC “IDGC of Volga” — Public Joint Stock Company “Interregional Distribution “Sfera” R&D Company”, LLC — Limited Grid Company of Volga”. Liability Company ‘“Sfera” Research and Development Company’. PJSC “MSZ” — Public Joint Stock Company “Mashinostroitelny Zavod”. SM — a high-flux vessel-type pressurized-water reactor; according PJSC “NCCP” — Public Joint Stock Company to its name in Russian it is translated “Novosibirsk Chemical Concentrates Plant”. as the most powerful reactor due 162 List of abbreviations

to a high density of thermal VAT — a value added tax. neutron flux. VK-50 — a boiling water reactor. SMART: S — specific ; VVER — a water-cooled water-moderated M — measurable ; energy reactor. A — attainable; R — relevant; VVER-TOI — a design for a two-unit NPP T — time-bounded. with VVER-1300 reactor.

08Kh18N10 (08Х18Н10) — structural SNF — spent nuclear fuel. high-alloy heat- and corrosion-resistant austenitic steel applied to manufacture SPS — a shipping package set. pieces from thin sheet and ribbon in car construction and machine manufacturing SRW — solid radioactive waste. industries; also used to fabricate consumer goods, hardened articles, welding devices STO — company standard. and reservoirs for chemical engineering, to work in the environment unprovoking SVBR — a lead-bismuth fast reactor. intergranular corrosion.

TIN – a taxpayer identification number. 08Kh18N10T (08Х18Н10Т) — chromium-nickel austenitic steel applied UDC — universal decimal classification for manufacture of welded articles; of books used worldwide; it has enhanced resistance its index is an obligatory to intergranular corrosion imprint element. in a number of industrial environments. “Uralenergostroy”, LLC — Limited Liability 42KhNM (42ХНМ) — nonmagnetic alloy Company ‘Managing Company applied for manufacture of special-purpose “Uralenergostroy”’. products, extra thin-walled tubes to fabricate reactor engineering components, USA — the United States of America. fuel claddings, neutron sources, USSR — the Union of Soviet Socialist nuclear reactor core elements etc. Republics. JSC “SSC RIAR” Annual Report 2016 163

GLOSSARY

of a specific isotope in a mixture Absorbing element — a) an assembling unit of isotopes. of a reactor that has a strong sealed cladding, usually in the form of a cylinder or ball, Fast neutrons — neutrons with kinetic and an absorbing material embedded energy exceeding the given value. into it to control the reactor reactivity; This value can vary in a big range. b) a key construction part of a shim rod It depends on the area that contains absorbing material. of application (reactor physics, protection or dosimetry). In reactor physics this value is Activity — the number of radioactive usually equal to 0.1 MeV. decays occurred in the given amount of a radioactive isotope per time unit. Fuel assembly — a set of fuel elements (rods, rodlets, plates, etc.) fixed together Business model — an integrated by a spacer grid and other components organizational and financial chart that are non-dismountable during of company activities the transportation and irradiation related to performance of different functions in a reactor. Fuel assemblies and principal processes at stages are inserted in the nuclear reactor core. of the product life cycle; a graphic presentation of material Fuel element — the smallest structural unit and money flows. of a reactor or fuel assembly containing nuclear fuel and/or breeding material Closed nuclear fuel cycle — a nuclear and located either in the reactor core fuel cycle, in which spent nuclear fuel is or breeding zone to produce thermal reprocessed to recover uranium energy and transfer it to coolant as well and plutonium to refabricate as accumulate secondary nuclear fuel. nuclear fuel. Discharge of radioactive substances — Global Reporting Initiative, GRI — controlled discharge of radionuclides a reporting system accepted in international to tanks with liquid radwaste practice and concerning economic, at a nuclear facility. environmental and social efficiency; Division — a business entity that has it is based on Sustainability Reporting an established procedure of relationships Guideline, technical protocols with the corporation; according and sector-oriented appendices. to this procedure this entity is defined IAEA Safeguards — a system of inspection as a division managing and verification of the peaceful uses other business entities of nuclear energy established within the management circuit under the international non-proliferation of such division. policy and supervised by the International Enrichment — a) is a content of atoms Atomic Energy Agency. of a specific isotope in a mixture of isotopes International Standard Book Number (ISBN) — of the same element if it increases the fraction a unique identification number of an edition of this isotope in a mixture; occurs used worldwide in book business, publishing in nature (expressed in percentage); and librarianship. The same ISBN number b) process resulting in the increase 164 Glossary

cannot be assigned to different editions. Nuclear fuel — a material containing fission The ISBN has been used internationally radionuclides that allows a nuclear chain since 1972 (ISO 2108 — 1972). reaction loaded in a nuclear reactor. The ISBN provides exact identification of editions, country of issuance, Nuclear fuel cycle — a chain of operations publisher and the book itself. to ensure nuclear reactor operation The ISBN is used worldwide in more from mining of uranium to radwaste than 160 countries. In each member state disposal. there is a national agency responsible for arranging the international standard Nuclear medicine — a branch book numbering of its state editions. of medicine involving the application In Russia the Central Institute of radioactive pharmaceuticals in diagnosis of Bibliography deals with it. and treatment of a disease; Along with the library-bibliography methods of remote X-ray therapy. classification indices, universal decimal classification and author’s number Nuclear power engineering — a branch the ISBN is a part of a so-called of power engineering concerned publishing package obligatory with the application of nuclear energy for book publishing. for heat and electricity supply purposes. Isotopes — variants of atoms and nuclei of a chemical element which have Nuclear safety — a general term the same atomic (ordinal) number describing the characteristics of a nuclear and different mass numbers. facility under normal operation and accidental conditions to minimize the radiation exposure Mission — one of the basic terms used on personnel, population and environment in strategic management; the main objective within the admissible limits. of a company, reason for its existence from the viewpoint of meeting Operator — an organization that has customers’ needs, competitive advantages an approval from the regulatory authorities and motivation of company’s employees. to operate a nuclear facility.

MOX fuel — a nuclear fuel that contains Radiation burden — the total of emission several oxides of fissile materials. Generally individual doses obtained or to be obtained this term is applied for mixture of plutonium in the course of operation, maintenance, oxides and natural uranium, enriched uranium repair, replacement or dismounting or depleted uranium which behaves similarly of nuclear facility equipment. (but not identically) to low-enriched uranium Radiation monitoring — obtaining data oxides used in fuel of most nuclear reactors. on radiation situation in an organization, The advantage of MOX fuel is that when it is environment and people irradiation levels produced the surplus of weapons-grade (includes dosimetric and radiometric control). plutonium is disposed, otherwise it is a nuclear waste. Radiation safety — activities to minimize radiation exposure on personnel Natural radiation background — ionizing and population to the lowest possible values radiation formed by space and ionizing using the means acceptable to the public radiation of natural radionuclides in order to prevent early radiation effects (on the top of the ground, in the air, and minimize late radiation effects food products, water, human body, etc.) to the admissible level. JSC “SSC RIAR” Annual Report 2016 165

Radioactive waste — nuclear materials Research reactor – a nuclear reactor and radioactive substances for which intended for generating data on physics no future is foreseen. and technology of reactors required to design and develop reactors Radionuclide — an atom with a specific of such type or their components. mass number, atomic number and nuclei energy state that has the lifetime Risk management — a process to make sufficient for observations. and implement management decisions focused on minimizing a probability Release of radioactive substances — of unfavourable results and potential release of radionuclides in the atmosphere losses caused by its implementation. as a result of a nuclear facility operation (e.g. NPP). Safety of nuclear facilities — a property of nuclear facilities to provide radiation Reprocessing of spent nuclear fuel — a set safety both under normal operation of chemical and technological processes and in case of accident for the personnel, to remove fission products from spent population and environment nuclear fuel and regenerate within the designed limits. fissile material for re-use. Stakeholder — physical and/or legal Reprocessing of radioactive waste — persons and groups of persons process operations to change the aggregate who affect or can be affected state and/or physical and chemical by organization's activities. properties of radioactive waste to convert them to conditions acceptable for transportation, storage and/or disposal. 166 JSC “SSC RIAR” Annual Report 2016 JSC “SSC RIAR” Annual Report 2016 167

Information Edition

JSC “SSC RIAR” Annual Report 2016

Contributors to drafting and issuing: A.A. Tuzov, F.A. Grigoryev, A.O. Vorobey, A.L. Izhutov, I.A. Knyazkin, Yu.I. Titova, A.L. Petelin, E.A. Zvir, R.A. Kuznetsov, S.A. Kiverov, S.S. Poglyad, E.V. Fokeyeva, V.V. Serebryakov, S.P. Prokopieva, I.M. Smirnova, A.P. Volkova, A.P. Mochalov, A.Yu. Sedin, N.V. Chertukhina, I.A. Korneeva.

Edited by Natalia Chertukhina. Designed by Victor Nedashkovsky. Desktop published by Lyudmila Nikishina. Translated by Irina Korneeva, Larisa Bolotova, Olga Artamonova.

Passed for printing on August 29, 2017. AGLettericaExtraCompressed, Myriad Pro, Myriad Pro Cond. Format 60×84/8. Published sheets ~ 14,35. Printed sheets 19,41. Circulation 50 copies. Order No. 716.

Dummy layout prepared by PR Office of JSC “SSC RIAR” Russian Federation, 433510, Ulyanovsk region, Dimitrovgrad, Zapadnoye Shosse, 9. 168 JSC “SSC RIAR” Annual Report 2016